Ethereum announced a month ago that “Ethereum 2.0” will be released in September. Implying? You will no longer have the system proof of work and will go to Proof-of-Stake. This means that no mining equipment will be required, but simply by depositing Ethers as collateral (through staking) rewards will be received.
This modification favors the operation of the entire network and drastically reduces energy consumption.
Since the announcement, Ether (the Ethereum cryptocurrency) has had a brutal rise of more than 85%:
In addition, on Wednesday, August 10, the inflation data in the US came out, being 8.5% year-on-year. Not only did it fall compared to the previous month, but it was less than what the market expected.
This news was welcomed by the stock and crypto markets, which accelerated their upward course.
The Nvidia situation
Nvidia is the leading company in the development of video cards. And this new Ethereum update is already suffering. Its sales within the “Video Games” category fell 44% compared to the previous quarter and 33% year-on-year.
Although the company explains it with macroeconomic problems, it is inevitable to associate it with the conflict they have over the end of Ethereum mining.
Let’s see how the stock has fared so far this year:
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Nvidia accumulates a 36% drop in 2022. Without a doubt, it suffered on a par with technology companies. And the finishing touch was the expectation of the end of Ethereum mining which, logically, affected its sales and profits.
The company has a significant stock of unused inventory. It remains to be seen whether they will be sold at a significant discount. Video card prices are falling sharply. An important factor is the situation in China, a country that has banned mining. This caused a fierce supply of plates en masse at very low prices.
It should be noted that Nvidia is the 11th largest company in the market. It currently has a valuation of USD 467,000M. If you continue on this path, you will be moving away from the podium.
Ethereum has given Nvidia a reality check, with its new update. What will happen to the plates, not being able to mine more Ether? There are other cryptocurrencies that can still be mined, such as Ethereum Classic, Ravecoin, and Monero. Logically, profitability can be reduced.
For now, Nvidia’s trend remains bearish, despite the rebound in recent weeks, as seen on the chart. In addition, they are suffering a huge drop in their sales and it remains to be seen how they will come out afloat. So, for the moment, it does not have good prospects.
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CEO of Charter Finance
Source: Ambito
