NVIDIA is the hardware tech stock's last gasp as crypto miners send it to volatility

FXOpen

The days of the old school computer hardware firms dominating the stock market were over a long time ago, however there has been one particular company that has been riding a wave of success long after its printed circuit board producing peers slid down the ranks.

That company is internal graphics card manufacturer NVIDIA and its success until recently can be attributed to a very unorthodox set of circumstances, that being the reliance on computer graphics cards for the mining of cryptocurrency and in particular Bitcoin.

Many of the industrial-scale Bitcoin mining rigs that have either been custom built or available off the shelf over the past few years have used NVIDIA graphics card for what is known as 'GPU mining', therefore NVIDIA's hardware sales have been very buoyant and their graphics cards very much in demand especially among Chinese miners which accounted for over 70% of all Bitcoin mining over recent years.

When the Chinese government swept across the country and enforced cessation orders onto many large scale Bitcoin miners earlier this year, operators of large mining rigs across mainland China appeared to begin to dump their systems and many became available on the used market for very low prices.

This flooded the market with used NVIDIA hardware, which reduced the cost of brand new equipment, therefore over the past few months, NVIDIA stock has been less buoyant than it had been previously.

However, a very interesting turn of events occurred subsequent to the Chinese government's blanket ban on Bitcoin mining, in that a large number of Chinese mining rigs were resurrected and exported to Kazakhstan, the United States, South America and parts of Eastern Europe and resumed operation in areas with cheap electricity.

This resulted in the demand for new NVIDIA graphics cards being in higher demand once again, and the stock price to rise.

However, this week begins with NVIDIA stock very much on the backfoot. At the end of the New York trading session on Friday November 17, NVIDIA stock was down 2.06% to $278.01 compared to $285.91 at the peak of its trading during the morning session.

The interesting dynamic here is that it spiked on Friday, rising to a very high $311.40 at 9.30am Eastern Standard Time, but then tailed off again immediately, taking it down to the same value that it had been trading at on Thursday December 15.

Despite that interesting bit of volatility on Friday, NVIDIA stock is now at its lowest value for a month.

With so many Bitcoin miners now establishing themselves in many regions of the free world and using powerful mining rigs previously used by Chinese miners, there could be a further wave of volatility in NVIDIA stock as it remains one of the graphics cards of choice for crypto miners.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Financial Market News

Weekly Market Wrap With Gary Thomson: FTSE, NZD/USD, USD, USD/JPY Weekly Market Wrap With Gary Thomson: NIKKEI-225, USD/JPY, GBP/USD, USD/CAD, Gold Weekly Market Wrap With Gary Thomson: S&P500, USD, SNB, TSLA A Yen For Volatility: US Dollar Surges as Japan Ends 8 Years of Negative Rates Weekly Market Wrap With Gary Thomson: US500, USD, US Inflation, USD/JPY

Latest articles

Weekly Market Wrap With Gary Thomson: FTSE, NZD/USD, USD, USD/JPY
Financial Market News

Weekly Market Wrap With Gary Thomson: FTSE, NZD/USD, USD, USD/JPY

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of  FXOpen UK, as he breaks down the most significant news reports and shares his expert insights.

  • FTSE 100's Holy Grail
Indices

S&P 500 Price Consolidates ahead of Earnings Season

On April 4, we wrote that the S&P 500 is showing signs of weakness around the 5,250 level. How is the situation on the stock market developing by today, which is the start of the reporting season

Forex Analysis

Analysis: EUR/USD Close to Year’s Low after ECB Decision

As predicted by analysts, the European Central Bank did not change the interest rate yesterday, keeping it at = 4.50%. This morning the EUR/USD rate is near the psychological level of 1.0700, which approximately corresponds to the 2024

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.