On November 14, after exhibiting several months of relative price stability, the cryptocurrency markets plunged from $210 billion in market cap to $185 bln, with Bitcoin falling well below $6000 to hover around the $5500 mark. The selloff, which affected all of the top ten currencies in addition to the broader altcoin market, brought crypto prices to their lowest level of 2018–a near-impressive feat given the how severe of a bear market the year has already been. While some analysts predicted that BTC and altcoins were finally reaching the point of exhaustion for selling, with a rebound seemingly imminent, the crypto markets went in the opposite direction, falling to below price levels not tested since Q3 of 2017.
While investors are still reeling from this week’s cryptocurrency price fall, which saw billions shed from the market capitalization in a matter of hours, chip manufacturer Nvidia is left dealing with the fallout.
Bitcoin Cash, in particular, saw its value drop precipitously in the crash, eroding all of the value sustained in the price run leading up to yesterday’s hard fork. Initial outlook on the BCH fork appeared to be breathing new investment life into the broader crypto market, with XRP and several other top ten currencies seeing double digit percentage bumps over the last week. However, it’s not becoming more clear that the contention and confusion surrounding the split, including the “hash war” being waged between the two fractions of Bitcoin Cash are having broad ramifications for the crypto markets–with some substantial bleed over into the traditional stock market.
Stocks, particularly blue chips leading the pack in the tech sector, have been exhibiting increased volatility over the past month, as many investors and bank analysts anticipate a coming recession for the U.S. market within the next year or two. On November 15, Nvidia released a fourth quarter projection that amounted to a lackluster outlook for the final months of the year, with the falling demand for cryptocurrency mining hanging over the forecasting.
While CEO Jensen Huang attempted to spin the numbers in a positive light, claiming that core business was doing well for the world’s number one chip manufacturer, he had to contend with the slumping effect of cryptocurrency on his company’s falling revenue,
“Aside from the crypto hangover, our core business is doing great.”
According to data compiled by Bloomberg,
“Revenue in the fiscal fourth quarter will be $2.7 billion, plus or minus 2 percent, the Santa Clara, California-based company said in a statement. That compares to the average of analysts’ estimates of $3.4 billion.”
Fallout from the underwhelming fourth quarter forecasting, in addition to the recent plummet in crypto valuation, led to widespread selling for Nvidia Inc. on Friday, with Goldman Sachs coming out to report that they were “clearly wrong” on their bullish view for the chip manufacturer. Stock prices fell as much as 20 percent on the day, leading the company to experience some of its worst losses since the 2008 collapse. Since reaching an all time high in early October, the price of Nvidia stock has now dropped more than 40 percent, no doubt in part to the falling demand for cryptocurrency mining rigs.