The price of graphics processing units (GPUs) from market heavyweights, including AMD and NVIDIA AMD and NVDA, has dropped.
Since their all-time high in November 2021, cryptocurrencies have reduced their market value by almost two-thirds.
Several reasons, including increasing interest rates, the Russian invasion of Ukraine, and inflation, have caused investors to flee riskier assets, contributing to the current market downturn.
However, crypto investors aren’t the only ones affected by the recent market decline. Hardware and other equipment typically utilized in the digital currency business for mining and other tasks have seen price reductions with the decrease in cryptocurrency pricing.
Graphics processing unit (GPU):
Graphics processing unit (GPU) costs have dropped significantly below the manufacturer’s recommended retail price for two of the market’s leading competitors, Advanced Micro Devices Inc. (AMD) and NVIDIA Corp. (NVDA) (MSRP). According to a survey published on June 19 and June 19 by technology data analytics company 3DCenter, the market price for AMD’s current-generation graphics cards (also known as GPUs) is around 92% off MSRP. Ten percentage points in less than a month is a significant change. Similar GPUs from NVIDIA have also seen price drops but at a slower pace.
While AMD and NVIDIA stock prices have dropped significantly from their highs, they have outperformed cryptocurrencies like Bitcoin over the previous year. Please refer to the table below for further details. Cause and Effect of the Crypto Market’s Price Drop
The cryptocurrency market crisis may have had a domino effect on the industry, contributing to the current decline in GPU pricing. Graphics processing units (GPUs) have been in high demand due to their role in the crypto-mining process, leading to intermittent shortages. If people stop buying cryptocurrency or crypto developers become more concerned about energy use, demand for GPUs might drop. The GPU market has been affect earlier by fluctuations in bitcoin mining.
In the event of a decline in the crypto business, graphics card manufacturers may not be similarly affect in the long run. Customers seeking these goods for other uses, such as gaming, may fuel demand as interest in GPUs for cryptocurrency mining wanes. Nvidia’s goods might benefit from it. NVIDIA graphics processing units (GPUs) have been ranked higher than other manufacturers in certain best-seller lists.
Share Price Movements of AMD and NVIDIA:
The stock performances of AMD and NVIDIA have also been quite different. Since their respective stock market peak seasons of the autumn of 2021, the value of Bitcoin and the individual firms’ share values have declined. However, neither firm has had a share price decline during the previous year, anything as severe as Bitcoin’s.
Bitcoin has lost almost 38.7 percent of its value in the last year, while AMD’s one-year trailing total returns are 0.2 percent as of June 23 and June 23. As of the end of the most recent calendar year, investors in NVIDIA stock had a negative one-year total return of -14.6%. Compared to the S&P 500’s -11.5% 1-year trailing total return over the same period, both equities have beaten Bitcoin and the entire market.
As the value of crypto assets has decreased due to economic uncertainty, so have the costs associated with the graphics processing units (GPUs) employed in their mining. The stock prices of GPU manufacturers Nvidia and AMD have dropped, but not as much as Bitcoin.
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