The persistent bearish mood of the crypto market where Bitcoin has slipped below the psychological price point of $8,000 has taken a toll on the stock price of Nvidia. The graphics chip manufacturing giant is considering taking cryptocurrency mining production off its budget.

Nvidia Stock Price Drops

Nvidia witnessed massive growth in 2017, which was propelled by the demand for its high-end Graphics Processing Units (GPUs), that are used for cryptocurrency mining. However, the company’s stock price, which was at a 52-week high on June 14, has now fallen to $244, owing to the existing market sentiment and declining mining profits.

The company was expecting sales of about $100 million for its cryptocurrency mining products in the second quarter of 2018, however, the actual figures turned out to be around $18 million, which left it with a large amount of unsold stock. Bitmain, the Chinese cryptocurrency mining giant which produces ASIC miners, reported a revenue of over $1 billion in the first quarter of 2018.

Nvidia is now focusing on developing its strengths in computer gaming, artificial intelligence, and data processing sectors. The company is getting ready to launch Geforce 20 series chips with new Turing chip architecture, which will reportedly be much more efficient than its GTX 1080 Ti and base GTX 1080 cards.

Bitmain, in contrast, is planning on filing an IPO for as high as $18 billion this September. The IPO will be listed on the Hong Kong Stock Exchange and underwritten by ABC Capital Management. The company has already closed a $1 billion pre-IPO financing round at a valuation of $15 billion. However, it is being speculated that the company is venturing into Artificial Intelligence with this IPO as the demand for cryptocurrency mining hardware is declining.

Cryptocurrency mining becoming less lucrative

Cryptocurrency mining is an energy-intensive process and it is profitable only as long as the mining reward exceeds the cost of mining. 2017 was a profitable year for cryptocurrency market units as Bitcoin grew from less than $1000 to nearly $20000. Ethereum, the second most popular cryptocurrency’s hashrate grew over 25 times last year. However, 2018 has not been very favourable for cryptocurrency mining as Bitcoin’s price has fallen over 70% from the all-time high, and investors are withdrawing their investments in ICOs. Experts say that cryptocurrency mining is profitable only if Bitcoin managed to maintain a price of at least $8000.

Hashflare, a “cloud mining” service which enabled speculators to rent processing power on the Bitcoin network, recently shut down its operations citing “a difficult time for the cryptocurrency market” as the reason. The company said that it had tried to lower down operational costs, but Bitcoin mining continued to remain unprofitable.