According to RBC Capital analyst Mitch Steeves, the rise in Ethereum’s price is boosting NVIDIA’s value. Steeves explains that higher Ethereum prices encourage greater use of NVIDIA GPUs for mining. On Monday, the chipmaker’s shares rose by $1.67 to $216.60.
Steeves regards NVIDIA’s GPUs as the market’s top performers today. He notes that transaction processing times have fallen significantly as prices climbed. Cryptocurrencies such as Ethereum, Monero, Zcash and Bitcoin have all seen gains this year. The market capitalization of digital currencies has surpassed $300 billion for the first time.
Ethereum mining time has shortened
Ethereum’s mining payback time is now roughly 5.6 months. Before the price increase it was about 9.4 months, Steeves reports. This change accelerates GPU use for mining and could drive further growth for NVIDIA.
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Steeves attributes the recent cryptocurrency price gains to institutional investors, who increasingly recognize the value of digital currencies. He expects continued investment inflows into the market.
Technological progress
Cryptocurrency technology is advancing rapidly. Steeves also points to development in Bitcoin’s Lightning Network. He says Ethereum’s Metropolis upgrade helped restore confidence in that ecosystem. While it’s difficult to predict whether these price increases will be sustained, he recommends that miners consider investing in any cryptocurrencies that can be mined with GPUs over the next two months.
Ethereum’s roughly 2,000% price increase this year has prompted miners to buy AMD and NVIDIA graphics cards to mine the currency, increasing hardware demand. NVIDIA has benefited from approximately $150 million in revenue tied to cryptocurrency miners.