Dispatch #154: Nvidia Has All the Chips

Aug 25, 2023 3 min read

Dispatch

In this patch of your weekly Dispatch:

Miners search for AI ⛏️
A bull has had enough 🐂
NFTs go marketing ✨

The Big Idea

AI and Bitcoin: The Brotherhood Needed in Tech

All eyes were pegged to Nvidia this week as the dominant chip producer’s quarterly earnings provided a healthy dose of suspense… only for a classic feel-good story to emerge Wednesday.

The company’s revenue more than doubled to a record $13.51B in Q2, surpassing Wall Street estimates of $11.19B.
The chip maker’s earnings per share stood at $2.70, exceeding expectations of $2.08.
The forecast is even shinier for $16B in revenue in Q3.
Perspective: Nvidia is valued at $1.16T surpassing the entire crypto sector’s market cap by $0.1T.

Nvidia's revenue surge is attributed to heightened demand for AI technology – the company’s graphics processing units (GPUs) dominate the market for training AI models, e.g. ChatGPT. Currently, the H100, its highest-end AI chip, is in high demand, which in turn makes Nvidia the biggest winner from this year’s boom in the industry.

The record earnings could have a ripple effect that reaches the crypto mining community, as the latter feels pressure (e.g. energy costs, inflation, and subdued market activity.) You see, Nvidia’s GPUs were the preferred mining equipment for many cryptocurrencies until Ethereum’s switch to Proof-of-Stake introduced new rules and eliminated the need for them.

Prior to this though, Nvidia experienced a true surge, riding the all-time highs of 2021 with the entire sector. So if the past is anything to go by, could a new synergistic partnership between miners and the company emerge? As AI is the talk of the town in the tech sector, could this be the way ahead to push technological frontiers, the place where it all comes to align for Bitcoin even?

As AI and blockchain intersect (AI tokens marked gains on the Nvidia news), they could pave the way forward with greater stability, utility, and innovation within the crypto ecosystem, positioning BTC and other digital assets as a true alternative in personal finance.

The Latest In…

Crypto Miners Dig in AI Land

Banking giant JPMorgan issued a report to highlight Bitcoin miners’ search for profitability and stability. Here are the findings:

Bitcoin miners are diversifying into high performance computing (HPC) services for the booming AI sector.
Beyond BTC, former ETH miners are also entering the HPC space after the Merge, which led to a surplus of GPUs available for sale.
The rise of AI and the subsequent demand for HPC offer a new and potentially more profitable avenue for utilizing GPUs previously used in cryptocurrency mining.

See our point about AI and blockchain intertwining now?

The Latest In…

A Bull in a Panthera’s Clothing

Pantera Capital founder Dan Morehead shared his positive outlook on Bitcoin’s future, suggesting that its longest period of negative year-over-year returns this summer is poised to end. Fair observation, we must note. Let’s not forget that despite the recent dip, BTC is up 20% Y/Y and the upcoming April 2024 halving could be a catalyst for further price increases as reduced supply is likely to elevate demand.

The Latest In…

NFTs in the Fast Lane 🏎️

An interesting trend is emerging as NFTs have found a surprising fit in enhancing fan experience and brand awareness. The 2023 Dutch Grand Prix is the latest adoption of the concept:

The 2023 Zandvoort Grand Prix in the Netherlands offers unique 'digital collectibles' to attendees of the Formula One racing event.
The collectibles showcase the distinct coordinates of the racetrack for its 75th anniversary.
Adidas, Coca-Cola, Gucci, McDonald’s, Nike and the Japanese Airlines are among the numerous multinationals to have already dabbled with the famous crypto tokens.

The Week’s Most Interesting Data Story

On a Scale of 1-10

Bitcoin has sporadically been all crazy and volatile, jumping 10% here and there, though it has performed robustly with a 60% uplift YtD. That may partly be explained by the constant and steady increase in addresses holding between 1 and 10 BTC - a commendable display from a vital cohort of BTC adopters.