March 27, 2024
Nvidia's Market Cap Surpasses Crypto Industry, Reaching $1.18 Trillion
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Nvidia’s Market Cap Surpasses Crypto Industry, Reaching $1.18 Trillion

This week, the market capitalization of Nvidia, the Wall Street AI sweetheart, reached an all-time high, surpassing the total value of the cryptocurrency industry with a $1.18 trillion market cap.

After Nvidia announced a $6.2 billion net profit on $13.5 billion in total revenue for its second fiscal quarter, doubling from the same period a year ago and exceeding analyst expectations, the chipmaker’s stock hit $502 on Thursday.

The business today stands taller than Mark Zuckerberg’s Facebook or Elon Musk’s Tesla as the sixth-largest publicly traded corporation. The cryptocurrency market, which CoinGecko analyzed over more than 10,000 coins, was valued at $1.09 trillion at the time.

The launch of ChatGPT by OpenAI has elevated AI technology to a hot commodity as the cryptocurrency market continues to find its groove following a difficult year in which token prices fell and some businesses failed amid the chills of the crypto winter.

“Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI, a new computing era has begun.” Nvidia founder and CEO Jensen Huang stated this on Wednesday.

The user-friendly ChatGPT interface makes using AI technology as simple as texting into a chat box. According to Mark Connors, the 3iQ head of research, it contrasts sharply with search engines like Google and the steep learning curve in crypto.

“Will Ethereum become a verb like Google? Not in the next year or two.” Connors stated.

The data centre section of Nvidia’s business, where the chipmaker makes GPUs for high-performance computing and cloud applications, saw a 141% sequential gain during the company’s last fiscal quarter. The segment’s revenue alone reached a record $10.3 billion.

“There’s a rational basis for Nvidia’s price increase that has to do with revenue, and tokenization enables digital assets to generate a yield or greater participation from investors,” he said. “The more crypto can embrace tokenization and bring real-world assets on-chain, […] the better the price trajectory will be for digital assets.” Ahluwalia, Lumida Wealth Management’s CEO, stated.

Ahluwalia continued by saying that Nvidia and cryptocurrency aren’t necessary rivals and that investment prospects in artificial intelligence don’t diminish the value of cryptocurrency. However, changes to the securities rules are required for the business to catch up.

“The most exciting opportunities in tokenization would trigger a securities law violation. Really unlocking token economics, which gives you value and price appreciation, is updating securities laws and having that direct conversation with Congress and the SEC.” He stated.

Following a flash crash last Friday that destroyed $84 billion in cryptocurrency market value, Nvidia made a U-turn. According to CoinGecko, over the course of two hours, Bitcoin fell 6% to about $26,250, while other currencies like Ripple (XRP) fell 17% to $0.47.

According to sources, Elon Musk’s SpaceX sold an unknown amount of Bitcoin. Additionally, macro worries followed China’s Evergrande, one of the largest real estate developers in the world, filing for Chapter 15 bankruptcy.

Even still, the market capitalization of cryptocurrencies has increased since it declined to $826 million in December of last year, not long after the demise of the crypto exchange FTX. And since January, Bitcoin has increased by more than 50% year-to-date from about $16,600.

Bitcoin’s gains seem modest in comparison to Nvidia, which has performed the best in the S&P 500 so far this year. Shares of the chipmaker were up more than 250% from $143 at the start of January when they reached a record high on Thursday.

Image: Wallpapers.com

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