In the battle of tech stocks, AI, and gold, Bitcoin is losing ground as ETF investments decline. Investors are shifting focus to other sectors within the crypto sphere. Nvidia has recently surged ahead, with its stock skyrocketing 180% in Q1 2024, surpassing Microsoft and Apple with Bitcoin support. Nvidia’s Q1 performance was stellar, with revenue hitting $26 billion—a 262% increase year-over-year—leading to a 600% profit surge compared to 2023. This solidifies Nvidia as the AI leader and catapults it to the world’s most valuable public company by market cap.
Amidst this backdrop, one analyst believes that Nvidia’s rise will create a bear position for Bitcoin.
Here’s what it means to you!
Cryptocurrency skeptic Peter Schiff has offered a surprising reason why Nvidia’s sudden rise is bearish for Bitcoin. He pointed out that each graphics processing unit (GPU) produced by Nvidia contains gold but no Bitcoin. Schiff’s comparison aimed to underscore Bitcoin’s alleged lack of utility. He further argued that Bitcoin needs gold for GPU mining, emphasizing, “Bitcoin needs gold. Gold does not need Bitcoin.
Nothing needs Bitcoin.” Gold, widely regarded as one of the best conductors of electricity, is a crucial component of GPU microchips due to its conductive properties and corrosion resistance, despite its high cost.
With changing Bitcoin dynamics, Investors like Stanley Druckenmiller are shifting their focus to AI and the gold mining sector, moving away from traditional tech stocks. Nvidia, the primary beneficiary of the ongoing AI boom, reportedly accounts for about 80% of all AI chips in data centers. Previously focused on the gaming sector, Nvidia also saw a temporary surge in demand during the cryptocurrency mining craze in 2017.
With a current market cap of $3.34 trillion, Nvidia’s value exceeds the GDPs of all but five countries. Schiff predicts that only the U.S. and China will stay above Nvidia. This isn’t the first time Schiff has criticized Bitcoin’s utility; in April, he stated that Bitcoin offers only scarcity without utility, contrasting it with gold’s enduring value.
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