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Can Bitcoin And Ether Prices Materially Affect NVDA And AMD Stocks?

Jul. 04, 2017 5:58 PM ETAMD, NVDA15 Comments
Rihard Jarc profile picture
Rihard Jarc


  • Lately, there has been a lot of reporting in the media linking NVDA and AMD to cryptocurrencies. Is there a material correlation between these two stocks and the price movement.
  • Calculations show that in 2017 there is no significant price correlation between AMD’s stock and Bitcoin. The same holds true when comparing AMD and Ether.
  • NVDA investors, however, need to pay more attention to this metric in the future, since the correlation with Bitcoin and Ether is very strong.

By now most of you probably know what cryptocurrencies are. This year, their prices have been soaring to say the least. The most popular cryptocurrencies nowadays are Bitcoin and Ether. I am not going to describe the specifics of cryptocurrencies, but rather show you how much of the "cryptocurrency effect" there is in the prices of two specific stocks, Advanced Micro Devices (AMD) and Nvidia (NVDA). It is important for investor to be aware of it, because it could strongly impact the future behaviour of these two stocks.

AMD and NVDA both produce graphic cards that are broadly used for gaming purposes. Lately, however, they have been sold like hotcakes for the purposes of crypto mining. Cryptocurrency mining is a process of acquiring cryptocurrencies like Bitcoin or Ether. To put it simply, for mining cryptocurrencies yourself you need a computer, internet, electricity and a good graphic card. Consequently, you need an NVDA or an AMD graphic card.

The total market capitalization of cryptocurrencies has grown substantially in 2017. It now stands at more than $100 billion. For comparison, that is just a little more than the joined market capitalization of NVDA and AMD, which stands at around $98 billion.

Total market capitalization of cryptocurrencies:

Source: coinmarketcap.com

The stocks of both companies have been soaring as well. The reports have been stating that this is partly due to the soaring of the cryptocurrency prices. Therefore, let’s have a closer look at the comparison between prices of these two stocks and the prices of Bitcoin and Ether.

Firstly, let me state that in this article I am not going to assess, how the sales of graphic cards to the crypto mining community are affecting the fundamentals of the companies. Instead, I will present how much the price fluctuations of these crypto assets affect the price fluctuations

This article was written by

Rihard Jarc profile picture
Entrepreneur, CEO, and co-founder of Typless, Private investor. Specialist for software and technology investments. Former Portfolio Manager and Securities analyst at one of the biggest European banks.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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