Bitcoin Forum

Nvidia released absolutely dismal sales related to crypto chip sales today after market close. This is another sign to me that the bear market is not reversing any time soon. Bitcoin is in a sustained decline, and I view the culprit as the stupidity and hype that sent it to $19,000 in the first place. It was unsustainable and it has now very much poisoned mentality as crypto continues to fail to prove a suitable replacement to digital fiat and traditional centralized payment processors.

Specifics on Nvidia's release:

Last quarter, they posted $289m in crypto-related chip sales, which is really a small percentage of their overall revenue. Despite that, they projected sales of only $100m this quarter, which at the time they made the prediction sent their shares down (despite it representing such a small portion of revenue). Today, they reported only $18m in crypto-related chip sales. Shares are now getting whacked in after-hours trading, which frankly makes no sense because they beat expectations on over all revenue and profit. Just shows that the idiotic crypto mentality has creeped into traditional investing.

I remember reading a news story claiming bitcoin's 12 month hash rate was up by "155%" last month:

https://bitcointalk.org/index.php?topic=4670899

Is it possible bitmain or another ASIC manufacturer is ramping up production and flooding markets, leading to nvidia experiencing a significant decline?


So much happening in a short span of time these days. Would I be accurate if my guesses were #1 fears over turkey toxic asset contamination #2 looming fears over the US / china trade war, or #3 american lawmakers may have severely weakened Trump's plans for economic sanctions against china. Which could mean the US economy might weaken, rather than china's economy weakening.

I don't really see how you can make price predictions with that sort of info...
We're talking about one specific company here, while there are tons of other players on the market.


This would be my first thought as well and if you look at Bitmain's profits from 2017, it seems pretty clear that they're dominating the market

http://fortune.com/2018/02/24/bitcoin-mining-bitmain-profits/

Besides, I think OP is kinda coming to the wrong conclusions here. Sales would go up after the price of Bitcoin rises, Bitcoin's value doesn't go up because of increased miner sales.

Nvidia is not selling chips for mining bitcoin.
Those are all used for GPU mining, and GPU mining profits are crashing down.

The demand is gone, on a site listing similar to eBay but just for our country, I've counted last week more than 100 ads selling between 6 and 100 GPU rigs with all that you need to start mining.
With a 1080TI making ROI in 25 months, I doubt anyone is still interested in them.

Back in December, you couldn't buy a damn video card, everything decent was only available for pre-order, now every model is in stock on all websites.

Any other happening other than this would be suspicious to say the least as this negative effect is expected to rub off on any business that have some stake in the crypto currency market. Any business that post any outrageous returns needs to be further investigated. Generally that is the feel. The market is down and investment in crypto related activities is expected to drop because ROI within a short period is no longer guaranteed.


Its not enough to put the entire blame on this. What really happen was the factors that aid such hype was no longer present but people still kept their expectation that high. There was no significant inflow of fresh funds into the market, fork coins alternatives have been turned to joke, KYCs was pursued aggressively, advertisement platforms to get the words out became unapproachable etc.

This is their big ambition. They launch products too expensive to market and demand fast sales. That's very hard for them, since most investors or users. Want cheap and modern even where they want to be donated. That is not wrong, they should review to stabilize the market again.

 I think you nailed it! This period feels like one of self correction. I personally think that the $19,000 mark was highly inflated. This was before the worlds governments started issuing heavy regulatory policies regarding crypto. The SEC had put their engine into high gear this year also.
  The more the regulators issue their statements, the more I think the price will self correct, especially with the potential of an ETF approval before the end of the year.

Bitcoin cannot be mined using Nvidia GPU, so bitcoin has no connection to this.
I think it is because of Ether where it will turn into POS coin + many of the coins and tokens have become less value, hence not useful from mining "Compared to last year's profit."

The decline in cryptocurrencies is due to dumping in altcoins as there are more than 1800 shitcoins and most of it in vain, therefore there must be a difference in value "correction." check BTC Dominance
I do not think recent political events have a little effect.

I have been looking at mining rigs recently.  Itching to get in but I continue to wait it out.  Hoping for some really cheap prices so I can hopefully recoup my investment as soon as possible as mining for profit is very sketchy. 

Obviously, the interested has started to go down that's why the price of Nvidia crypto chip is down as well. Remember last year it was reported that they are running out of stocks and they can't cope up with the demand. And even gamers who uses Nvidia is blaming crypto's especially altcoin miners. But now the coins has flipped, perhaps there are more supplies as anticipated by Nvidia unfortunately no one is buying resulting to the price going down.

I dont see any significance of these manufacturer on deciding the price movement of the crypto in the future to come. I mean we can talk about the increased or decreased network difficulty due to reduced production capacity of the nvidia plus there could be shortage of the GPU's and stuff like that. It doesnt matter how much revenue these people generate because it has got to do nothing with the current market situation.

Plus it would be wrong to compare the NVIDIA producer with ASIC one because they both are different categories of machineless one mines the bitcoin and the other altcoins!

Help me correct if im lost!

I noticed that many miners sell their equipment, for sure it is not suitable for them, since they decided to sell this equipment

To reply to both of you, chip sales are a leading indicator of sentiment. So follow my logic here: if chip sales are weak, it's because miners aren't investing in new equipment, which is likely because they don't think it will pay for itself. This means they don't see the price increasing. Miners, more than anyone else, are likely to have a better feel for the future price because their viability is at stake. When miners expect the price to continue rising, they can run losses in the near term to buy more equipment because they expect the higher price to eventually make up for it. So the inverse is the conclusion here. The fact that nvidia, which is a public company well-versed in issuing public guidance under SEC rules, was so blindsided by the weakness for crypto chips in the latest quarter is an indication of how fast the market is slowing down, which indicates how bleak miners view future price prospects to be.

The difference between nvidia and other crypto chipmakers is nvidia is a public company. They issue forward looking guidance and it was to meet certain requirements. Rose private chipmakers have no such obligation and are reporting numbers lookin backwards, so Bitmain's profits in 2017 are a lower quality data point compared to nvidia and also wildly outdated at this point.

That's why I think nvidia's guidance portends to poor sentiment by miners, which in turn portends to a poor price outlook going forward.

Good point on the GPU mining, but I would counter that Bitcoin is a proxy for the entire crypto market. Alts are not going to thrive while BTC languishes, as alts often trade in the same direction because of their pairing with BTC. So weak alt interest can be highly correlated with weak BTC interest. While the weak guidance by nvidia doesn't DIRECTLY indicate poor Bitcoin interest, it seems highly likely that alt interest is down because BTC interest is down.

This may be because of the low cost of maintaining it. It leads to inadequate operating funds. So this product will be slow and limited. And I think of finding another source of energy to use for this mining tool. It may be based on wind or water currents, etc. It is also considered a cost-effective solution.

Bolded:

There's a statistic posted here which claims bitcoin's total hash rate increased by "155%" from january 2018 to the present.


That could indicate that miners are buying additional mining hardware in anticipation of bitcoin's price rising.

There could be one main issue present in the GPU versus ASIC paradigm that explains nvidia's declining demand report. "Nanometer scale in semiconductor manufacturing process." For a time, GPUs manufactured by companies like nvidia had an advantage over ASICS in that they were manufactured on a smaller nanometer scale. Smaller nm silicon process generally indicates lower power consumption and a greater number of transistors per area, which can translate to greater overall functionality. GPUs having this advantage translated to them being competitive against ASIC designs which were more optimized towards cryptographic functions.

I think over time, ASICS have evolved and improved enough in terms of nm process to where GPUs are no longer as competititve. And so we see nvidia's GPU demand for mining purposes declining significantly. While the overall hash power of bitcoin's miners increased by 155%.

That's the closest I can come to explaining it.

If you want numbers, nvidia's current GPU's are fabricated @ 12 nanometers.

While bitmain's ASICS are fabricated @ 16 nm.

I think the gap between GPUs and ASICs used to be much larger, which gave GPUs a better competitive edge.

I agree with the gent that said nvidia is not the only source of gpu mining and this doesn't really change all that much on gpu mining space for the long run but to be honest I think it just shows how deep we are in this prices, even miners who generally mine for future profits (because the prices are usually low when they mine and they wait a bit before they sell) and just cash out their costs and keep the rest to sell at a later date when bitcoin goes up, they obviously are not seeing a bigger future for the short term hence the drop at the sales.

Hence, I think the easiest assumption we can do is at least at the short term we may not see a great spike at the price of the altcoins we all know, not at least trhu miner pushing.

That's a pretty safe assumption. If Bitcoin isn't in the mood to pump, which it may not be for a very long period of time if the 2014/2015 bear market is our main indicator, then altcoins will continue to bleed hard.

People praise altcoins for how fast they can increase, but they discard the fact that they also tank just as quickly. Bitcoin down 10% mostly translates into a +20% altcoin decline, which is killing it for miners needing every penny.

I have seen several people state that it might be a good time to start shorting these companies, and it actually is a good point with how Nvidia and AMD stocks started rallying when crypto mining started to take off.

It has nothing to do with the nm in the chips, it's all about reward and availability

It's simply because back in the winter/spring you couldn't just pick up an ASIC from Walmart, plug it in and start mining. You had to wait for the order...and there was a looooooong wait....

Bitcoin difficulty doesn't always reflect the price because there wasn't simply enough ASICs to cover the spike in mining profitability. The same was experienced by the GPUs when you simply could't buy a single damn videocard.

But at this point, things start to have a few slight differences.

If you're lucky with cheap energy, you might still get an ROI on an S9J in 6 months, as it brings me about 1.86$ a day at a price of 500$, with a 1080ti which I can buy for 800$ right now I get 72 cents....

If I own a powerful GPU I can still let mine during the night, when I'm away, as long as it's profitable I don't give a damn as I would have anyhow bought it either way, mining or no mining. When it comes to ASICs you simply dont't have this kind of freelancer miners :P dragging up the difficulty and not caring about ROI.

And the third...
No ASIC manufacturer can't compete with Nvidia or AMD in capacity...nor it is sure it can sell those products
Nvidia can easily produce 1 million cards even if ETH goes down as it could simply sell them to gamers and delay the next series to get rid of them, if bitcoin drops to 1000 bitmain has nobody to sell 1 million miners so they simply can't mass produce them and keep them on stock.

This would become clear if both coins would go in a week to x5 in value.
The eth network will jump in value far faster than the bitcoin chain, and it will take months for the BTC hashrate to become x5 to reflect the price.


The situation is indeed a bit bad for altcoins. I'm amazed that they are not following BTC during this little rally, and really interesting it that some are actually going down.
If the trend follows we're going to see a lot of chains struggling against a 51% attack

Unfortunately I understood a month ago that crypto market would likely continue falling in the future. Actually Nvidia confirms my supposition. It need not to be a genius person to understand that crypto market is in the strong downtrend. I would say that charts cry us about that. Nobody discourage investors to sell their altcoins and to wait the better time for new investments. I also have noticed that lots investors who have disappointed in crypto assets are seeking a refuge for their capital and it means that they also will make a withdrawal and go out from market. So, I do not wait anything positive on crypto market in the near future.

I think it is the other way around. The decline of sales by the gpu manufacturer will only mean that the prices of cryptocurrencies could not keep up to the miner's expense that is why they don't see gpu mining profitable anymore. The decrease in sales of gpus does not mean that the bear market will still continue there is no point on connecting that, it just simply mean that the prices of cryptocurrencies and the block rewards they are getting is simply not appealing or profitable for them to still continue. Or it just simply mean that all the willing miners out here possibly are satisfied with the mining rigs they all have and has no plans of buying additional hardware anymore, especially when the new RTX gpu series of NVIDIA is about to launch.

Yes you are right. Maybe they must recheck or review their product as to how effective and affordable is  it to the investors. They must spare time to study and decide for this properly.

That's what people should understand. The lack of interest in chips has nothing to do with bear market. GPU mining was slowly becoming unprofitable anyway and their 100m predictions must have been based on the value of cryptocurrencies growing beyond the 2017 ATH. They made their predictions on the last 6 monts of 2017 and projected the profits onto 2018. You can't do that if you want reliable data.

Unfortunately ASIC is not helping the GPU companies as well. ASIC are taking over all the algorithms of mining. At the moment there is no money on GPU anymore with the current market.

The fabrication process invokes moore's law.

A smaller nm semiconductor process gives you a higher hash rate and lower electricity consumption. Have you ever wondered how new generations of ASICs produce greater hash rates @ decreased energy consumption? Its due to the downsizing in nm scaling.

This observation holds true with both ASICs and GPUs. It plays a big factor in how competitive GPUs are with ASICs in terms of mining profitability.

Availability and backlog of orders might be a valid point. That hasn't been an issue in a long time though. Its more of a historical myth that hasn't necessarily reflected the condition of markets in awhile.

Most coin price drop more than 80% and miners dont have much incentives and profits. With bitcoin price cheaper than before, investor prefer buying in market rather than mining and i think it reducing chipset demand. I am believe when market recover, demand on chipset will increasing again

You are terribly exaggerating things, as always. Bitcoin is not in a sustained decline, it is not even in a decline right now, let alone sustained. From a trader's point of view we are in what is called a sideways market. From a more global (fundamental) perspective we might have entered the stable phase (think US dollar here), which can last for a very long time. Even though I don't quite believe in that thing myself, it may be a pivotal point at which speculation subsides and real growth expands (kind of dynamic balance).


Actually, I am not surprised at all. I don't really know if it is a fact of life but I'm strongly inclined to think that all these graphics chips allegedly designed specifically for mining (these were likely just defective chips which would otherwise be trashed anyway) were totally subpar when compared with genuine miners. So we just got back to normal.

I agree that we now have the bearish market, because of previously have a really bullish one, but I find it positive that Nvidia sales for crypto purposes are dropping. Graphic cards are designed no display visual effects, make the gaming and film watching experience more enjoyable. Mining is just something they happen to be good at, but gamers are pissed that miners make the demand for graphic cards too high. They should be buying equipment specifically made for these purposes, like Antminers instead. And there are also quite some pos coins, so maybe people are just using more of them.

This can be due to the small amount of maintenance it has. It extends to inaccurate funds in its operation. This product is so delicate and limited. when im thinking of finding another energy source to use for something of mining. it can also be based on a wind or sea waves and so on. It is defined as an event that is truly effective as a solution.

I've read it somewhere on the Web about a year ago (maybe a little over a year) that ASIC's had already reached their maximum theoretical capacity (in terms of hashrate) due to technological limits imposed by the semiconductor process based on silicon. It has been the case with CPU's for almost a decade already. Processing frequencies no longer grow as you can't indefinitely diminish the size of the tranny. Yeah, I know there are a host of other factors at play here, but sooner or later stray quantum effects invariably kick in. And with CPU's this threshold seems to have already been reached. Perhaps, it is the same with GPU's as well.

That is what happens in theory, but as I've told you before, the reality looks different

This is the ETH hashrate, as you can see from June 2017 to February 2018 is has jumped x5 times, and from March it hasn't advanced even 20%.

https://i.imgur.com/kDDZmF9.png

This is BTC hashrate:
https://i.imgur.com/OmfQpAl.png

From June to March it has gone up 4 times, but.....it has also gone 2.5 since then, unlike ETH.

So, what's the normal conclusion?
That is a far shorter time span ETH miners have managed to bring the hash rate closer to a point where it makes little sense to mine, this due to the availability of miners.
In BTC case, it was never a problem of having cheap electricity and mining not being profitable, and this is the reason we're having continuous growth as more and more ASICs are being produced and sold.

If indeed your assumption of ASICs taking over from GPUs in ETH mining would be real we would have seen a spike in the hashrate, right? Which is not there!!!!!

There might never be a significant spike in bitcoin's mining hash rate. Such efforts have the potential to be cancelled out by shifts in bitcoin's difficulty mining algorithm, which could reduce the cost effectiveness of deploying a significant rise in hash power. The type of spike you're looking for could also suggest a significant spike in ASIC manufacturing quantities, which is unlikely.

That entire chart you posted resembles a significant spike in btc mining power in my eyes. (Example: the spike above september 2018.)

Especially when factoring in decline of demand for nvidia GPUs and GPUs in general.

In June we had one of the biggest spikes in hashrat,e 14.88%, just two points below the ones in December

Ok, let's take it in another way....
Right now, an S9J at my current power rates is bringing me close to 60$.
At this profitability rate, people are still adding miners.

Back in January, the same ASIC would have earned you close to 6 times this!
Why wasn't there a bigger rise in difficulty, and why we have them right now, when it's clear profits are down, increases comparable to that of December and January ?
And no, it's not because of more efficient miners, the current generation is nowhere near an increase of that proportion in hashing efficiency. It's simply because there weren't enough miners.

A look at bitmain's thread will show you that they've hiked prices for miners by a factor of 2 and still got sold out in a matter of hours. Why? Because there was nothing else to mine with available for sale.GPU mining reached its peak pretty fast due to the insane rates at which they can manufacture video cards, that's all.

It's like a guy who has 10km2 of land and buys 5 tractors and another who buys them one by one as in his country there are no tractors for sale.
In the first case, the guy will reach it's maximum efficiency fast and doesn't need additional tractors, the other is slowly but surely getting there. The first manufacturer has seen a 500% increase in sales and now he must brace for a 400% drop, the other is maintaining its sales rates at the same number.

Simply put, Nvidia thought (?) ( I'm not sure they've forecasted a linear growth) that ETH would increase or at least maintain levels to 01-01-2018, which would reflect ina 3x reward for miners. But ...something went wrong  :P

often happens that when ordinary investors turn away from the market, the market begins to grow. so maybe this is the beginning of growth

And another drop, as AMD suffers the same way:
https://www.marketwatch.com/story/amds-stock-craters-more-than-20-after-hours-on-weak-graphics-sales-2018-10-24

What puzzles me, is the fact that the spokesperson mentioned they are expecting to see again growth in Q4.
So ..he is either:
-Bullish on crypto prices
-Expects sales because of x-mas period
-He talks crap just to calm shareholders

Even with the decline of their crypto chip production, I think it doesn't mean that Nvidia was the main reason why Bitcoin price plummet since it previous ATH of $20k. There should be other reasons to consider another this issue and not just Nvidia alone.

Of course Captain Obvious!!!
The drop in sales is because the drop in crypto prices, we know what caused it, that's what we have discussed for two pages.
Did you bother to read  anything in this topic besides the title?

I don't knoemif Nvidia's chip sales relate much to crypto currency. I mean if crypto currency is actually hinged on the sales of Nvidia chips then that won't be a decentralized currency. I think thearket itself is down whether on crypto currency or in the stock market's point of view.

Sales do not plummet right now it is just not as big as companies predicted because after last year when so much people wanted to get it the companies tough the demand would continue to increase. When they made lets say 100 of something and sold all 100 they decided to make 150 of it and sold all of it and than 200 of it and sold so they thought they could increase the capacity as much as they can and will probably sell all.

However the market fell and the prices plummeted so instead of selling 500 right now they are selling 200, still more than they used to sell but much less than what they expected. Numbers are made up of course I don't know exact numbers but in general they are not remotely plummeting at all. They are still going amazingly and I think it is still alright considering AMD partnered with 7 companies to offer different mining equipment for people.

Ok. So the sales of silicone computer chips are down, I don't think this will affect the crypto currency prices at all. I mean if the stock market supposedly doesn't affect crypto currency then why would the sales of one of the major computer companies affecr crypto currency at all? Then again, I don't know how all this works.

I think it will start to go up again soon. The reason for this is that the more miners are shutting down their systems means the less difficulty we will have. The only people who currently mine are the people who are willing to work at negative right now for future profit potential (which can be done by just shutting down the miners and buying the coin itself instead of paying electricity).

However, when the difficulty goes low enough there will be a potential to mine again and profit from it. Hence, we are going down right now and we need to wait a bit more but when the difficulty reaches to a point that its profitable again we will see chip sales going up again.

Well, i think that it maybe caused by smart phones being better in an ecosystem than laptops. I mean i see more and more people opting to switch from laptops and desktops to just tablets for better battery life and simpler functionality. I see less and less hardcore gamers these days that would beed high end chipsets which are totally irrelevant to crypto currency sales.