Nvidia's Market Cap Over Cryptocurrencies Are We Still In The Early Stages Of The Crypto Industry?

Shares of the chipmaker hit $502 on Thursday after Nvidia reported second-quarter net profit of $6.2 billion on revenue of $13.5 billion, doubling from a year earlier and beating analysts' expectations.

Nvidia's strong results this quarter were fueled by a 141% sequential growth in its data center division, which makes GPUs for high-performance computing and cloud applications, with revenue from the data center business alone hitting a record $10.3 billion.

Ram Ahluwalia, chief executive of Lumida Wealth Management, said the surge in chipmaker stock prices is a direct result of expected revenue growth, and that cryptocurrencies need to embrace use cases such as tokenization to achieve similar results.

Nvidia is currently No. 6 among public companies, ahead of Elon Musk's Tesla or Mark Zuckerberg's Facebook. Meanwhile, the more than 10,000 cryptocurrencies tracked by CoinGecko have a market valuation of $1.09 trillion. Meaning, Nvidia’s market capitalization also exceeds the overall market capitalization of cryptocurrencies.

Mark Connors, head of research at 3iQ, said: “Nvidia’s share price speaks to the fact that they are a leader in producing AI hardware. As it relates to cryptocurrencies, it shows that we are still in the early days. "

"Enterprises around the world are transitioning from general-purpose computing to accelerated computing and generative artificial intelligence. A new era of computing has begun," Nvidia founder and CEO Jensen Huang said in a statement Wednesday.

Last year saw token prices fall and several companies close during the crypto winter, which continued to find its footing after a rough ride, and OpenAI’s release of ChatGPT turned artificial intelligence technology into a hot commodity.

ChatGPT's simple and easy-to-use interface makes using AI technology as easy as typing in a chat box. Conners pointed out that this is in stark contrast to search engines such as Google and the steep learning curve of cryptocurrencies. For search engines such as Google or cryptocurrencies, AI is surpassing them.

As for whether Ethereum will become a verb like Google? Connors said. "Not in the next year or two."

"Nvidia's price increase has a rationale, which is related to income, and tokenization can allow digital assets to generate income or allow investors to participate more." said Ram Ahluwalia, CEO of Lumida Wealth Management. “The more cryptocurrencies embrace tokenization and bring real-world assets on-chain, the better the price trajectory for digital assets will be.”

Ahluwalia added that there is not necessarily a competitive relationship between cryptocurrencies and Nvidia, and investment opportunities in artificial intelligence will not diminish the value of cryptocurrencies. But for the industry to catch up, securities laws need to be adjusted.

“The most exciting opportunity in tokenization is to cause violations of securities laws,” he said. Committee to engage in direct dialogue."

Nvidia's flip comes after a flash crash last Friday that wiped out $84 billion in cryptocurrency market cap. Bitcoin fell 6 percent in two hours to around $26,250, while altcoins such as Ripple (XRP ) slumped 17 percent to $0.47 in the period, according to data from CoinGecko.

As for the reason for the decline in the market value of cryptocurrencies, there are reports that Elon Musk (SpaceX) and Elon Musk (SpaceX) sold an unspecified amount of Bitcoin, and Evergrande, one of China's largest real estate developers (Evergrande) filed for bankruptcy protection caused by the macro unease.

However, the cryptocurrency's market capitalization has recovered since falling to a low of $826 million in December, shortly after the collapse of cryptocurrency exchange FTX. So far this year, bitcoin has gained more than 50 percent from around $16,600 in January.

Bitcoin's gains look tepid compared with Nvidia, the best-performing company in the S&P 500 so far this year. And when Nvidia's stock hit an all-time high on Thursday, it was up more than 250% from $143 in early January.