Crypto Winter Survivor: Inside Nvidia’s Difficult Relationship With Mining

On Feb. 14, California-headquartered gaming and computer hardware manufacturer Nvidia reported full-year revenue gains in 2018, despite being one of the companies worst hit by the cryptocurrency market dip and subsequent lack of demand for mining components.

The firm’s main products include graphics processing units (GPU), among others, which became widely purchased by miners during the crypto boom of 2017 — as a result, the firm’s revenue started to correlate with the crypto market condition (at least to some extent), which resulted in a few shake-ups.  

Company profile / NVIDIA

2017: Nvidia enjoys the crypto boom, becomes substantial part of the market

In 2017, its primary GPU product line, labeled "GeForce" — as well as its direct competition, Advanced Micro Devices' (AMD) "Radeon" units — began surging in price as the crypto frenzy unfolded and Bitcoin (BTC), along with altcoins, gained mainstream recognition. That year, according to Jon Peddie Research, a market research firm for the computer graphics industry, miners purchased around 3 million devices for more than $700 million. As a result, Nvidia inadvertently became one of the market’s most significant players.

Graphics Cards Market Shares

The ever-increasing demand for mining equipment lead to higher prices: As Cointelegraph previously reported, the cost of flagship chips rose by 25 percent, with Nvidia’s GeForce 1080 being sold for more than $1,000 during the market peak, while it normally retailed for $550. According to media reports, Nvidia even started limiting its online sales to avoid excessive resell, allowing customer to buy no more than two items per person.

The company’s seniors greeted the sudden increase in sales caused by the rapid growth of an emerging market. In August 2017, while talking to MarketWatch, Nvidia CEO Jensen Huang appeared notably bullish about the crypto industry:

“Crypto is here to stay, and the market will grow to be quite large. [...] It’s not likely to go away any time soon. There will be more currencies to come, they will come from different nations. [...] We stay very close to the market, and understand the dynamics very well.”

In May 2018, Nvidia shared information about its revenue from chip sales to the crypto mining market for the first time. Specifically, the manufacturer reported ea