Prediction Win: Video Card Sales

Two months ago I predicted that rational Bitcoin miners should liquidate hardware in advance of a hardware glut...

Well... the glut has arrived...

"Nvidia also announced Q3 revenue projections that fell short of expectations, saying it will bring in $5.9 billion in the quarter. Wall Street was looking for $6.9 billion"

That's almost a 15% miss.

The professional mining rigs use mostly GPUs because they're highly efficient with mining algorithms.  I couldn't find total GPUs in use,  but there's an estimated one million "miners" so guesstimate 10-20 million GPUs.  Due to their 24/7 use, I'm pretty sure the miners were regularly upgrading to reduce energy costs.  An annual 20% replacement rate is 400k to 800k cards or 4 to 8% of Nvidia's annual sales (estimated 10 million cards).  I suspect that most miners suspended upgrades when they began losing money in May, 2022.

"NVDA has dramatically understated its GPU exposure to crypto-mining, ranging from $1.5b to $1.8b per quarter".

That's over 10% of their sales. Do the math.

A bigger issue will be when miners liquidate millions of high performance rigs in competition to new GPUs.

The only permanent fix for Bitcoin is to eliminate the consensus mechanism.  Bitcoin becomes another centralized currency except without national backing/support and no need for mining.  Think about that for awhile.

Coming soon...