Nvidia Pulls Out of Crypto Mining Due to Low Profit
Nvidia, the largest graphic card and chip manufacturer in the world, has officially decided to quit its crypto venture due to the low profit.
Colette Kress, CFO of Nvidia has made a statement that demonstrates the revenue of their cryptocurrency-specific products and the firm is expecting ‘no contributions’ from crypto-related sales for the rest of 2018:
“We believe we’ve reached a normal period as we’re looking forward to essentially no cryptocurrency as we move forward. Our revenue outlook had anticipated cryptocurrency-specific products declining to approximately $100 million, while actual crypto-specific product revenue was $18 million, Whereas we had previously anticipated cryptocurrency to be meaningful for the year, we are now projecting no contributions going forward.”
Although cryptocurrency is not the main business, investors ignored Nvidia’s growth in its gaming market and ditched the stock. Nvidia’s stock fell 4.9% to $244.82 a share on last Friday.
Jensen Huang, CEO of Nvidia emphasized that the company’s main businesses are doing “terrific” and Nvidia continues to show strong growth on a year-over-year basis. According to their financial report, sales from gaming rose 52% to $1.8 billion in the second quarter and its Data-center revenue increased 83% to $760 million.
However, Huang agreed with Kress’s point and added that its crypto mining chips has declined substantially in a bear market and they are not planning to go any further in this field:
“Our core platforms exceeded our expectations, even as crypto largely disappeared. We’re projecting no cryptomining going forward.”
Nevertheless, the mining giant Bitmain still makes a $1 billion profit in the first quarter of 2018 while Nvidia only generated a profit of $550 million, approximately half of Bitmain’s.
In addition, 8BTC has reported that the hashrate of bitcoin network has continued to increase while bitcoin price has fallen past the break-even points. There are still major mining expansions happening, especially from more efficient miners.
As thus, Nvidia ascribe their poor performance in crypto venture to the bear market is not accurate. The main reason is the mining giants including Bitmain, Canaan, as well as Samsung get rapid progress in their business development which makes Nvidia become less competive in the crypto market.