Chinese Regulation of Cryptocurrencies Has Only Increased GPU Sales
Last week, towards the middle of September, the news broke that the Chinese government would request a halt on the exchange of all cryptocurrencies within the country. This caused the largest of the currencies, bitcoin, to take a sharp dive along with the other cryptocurrencies. Investors have been fearful of what this will do to chipmakers such as Nvidia Corp. (NVDA) or Advanced Micro Devices Inc. (AMD), who’s stock prices have respectively increased substantially partly due to the demand their processors have in the world of mining for bitcoin.
Analysts at RBC Capital gave out a statement that they were bullish on the semiconductor market, suggesting that the crackdown from the Chinese won’t affect the GPU business in the long run.
A note written by RBC’s Mitch Steves stated that the Chinese ban on cryptocurrency trading will most likely “increase the demand for crypto-currency-related GPUs.” These GPU’s are needed for the process of mining bitcoins.
Steves further stated that “with the China ban, the only way to obtain crypto currencies mined with GPUs is to now mine them with computing power (or purchase them i person from a stranger). China is now banning VPNs and straight purchases (Fiat to crypto), which means the best way to obtain the currency without purchasing it is to mine it using GPUs.”
The suggestion by Steves essentially means that individuals who are attempting to get the digital currencies will need to get more computing power in order to do so since that is “the only legal way.”
The analyst from RBC who has rated NVDA to outperform and views AMD as “the best chip for cryptocurrency mining from a price to performance ratio, has stated that he expects “decentralized exchanges” for the currencies so that they cannot be controlled by any one entity.