Forget Bitcoin, This Hot Tech Stock is a Better Buy

Bitcoin prices have grown tremendously in recent months as institutional investors and large corporations have invested money in digital currency, but the volatility in the cryptocurrency market has started to hurt again.

The price of bitcoin fell to just over $ 34,000 on January 13 after climbing to over $ 40,500 on January 9. Such volatility makes cryptocurrencies like bitcoin a risky bet for investors looking for stable returns. Additionally, some Wall Street companies are concerned that the value of cryptocurrencies may go to zero.

However, there is no denying that cryptocurrencies are a hot asset class that many want a piece of. But is there a safer way to invest? The answer is yes, and this safer way is through NVIDIA (NASDAQ: NVDA) – a hot growth stock that has ignited the market over the past year.

NVDA data by YCharts

NVIDIA is already profiting from the cryptocurrency boom

Cryptocurrency miners use graphics cards like NVIDIA to “mine” digital currencies. Cryptocurrency mining demand accounted for nearly 5% of NVIDIA’s revenue three years ago, when cryptocurrency mining was booming. The good news for NVIDIA investors is that the recent surge in cryptocurrency prices has resulted in renewed demand from miners, especially since the launch of the company’s new Ampere cards.

The graphics specialist sold $ 175 million worth of GPUs (graphics processing units) to miners in the third quarter of fiscal 2021, according to RBC Capital Markets. While this would only represent 3.7% of the $ 4.73 billion in revenue generated by NVIDIA in the quarter, mining-related demand is better for the company as demand exceeding supply has leads to higher prices.

NVIDIA’s latest RTX 30 series graphics cards are in short supply due to massive demand, both from gamers and cryptocurrency miners. The cards would be out of stock as soon as they go on sale. As a result, NVIDIA now claims that GPU supply will remain low throughout its fiscal first quarter, which ends in April.

NVIDIA also points out that sales of its latest 30 Amp RTX cards are at twice the pace of previous RTX 20 series cards. This combination of incredible demand and insufficient supply has resulted in the prices of the products soaring. GPU.

Big wins to come

Cryptocurrency mining will have a dual impact on NVIDIA’s business – one in the form of increased demand from miners, and the other in the form of higher prices. Additionally, the company could consider creating dedicated crypto mining cards if it sees significant demand from miners. NVIDIA says it does not know how much of its sales currently comes from this market.

But the shortage of graphics cards and the effectiveness of the new RTX cards for digital currency mining indicate that mining demand could be strong. An Ethereum miner could recoup their investment in an RTX 3080 in just 233 days, a big improvement over the RTX 2080, which would have taken two and a half years to become profitable.

Additionally, RBC says recent technical changes in Ethereum mining will force miners to switch to new hardware. Thus, NVIDIA could make a big win in the cryptocurrency market in 2021.

Add in the main catalysts that NVIDIA sits on – data centers and video games – and it becomes clear why it would be better to join the cryptocurrency craze through the chipmaker instead of directly buying coins. crypto-currencies. NVIDIA has a diverse business and will help investors avoid the speculative nature of the cryptocurrency market.