The AI-themed crypto market has soared following the excitement surrounding Nvidia, the world’s most popular chipmaker, after its shares rose to an all-time high in its second quarter.
The chipmaker’s soaring fortunes have led to more emergence of more corporations between Artificial Intelligence and digital assets. This is due to the demand for chips from Nvidia powering AI applications such as ChatGPT.
Nvidia’s gains after boom in chip demand
Nvidia’s value rose after successfully predicting a chip demand boom for its computer chips. The company gave its valuation, which had more than doubled in 2023 in the middle of optimism on the progress of generative AI applications.
The hype surrounding generative applications was sparked late last year after Open AI unveiled ChatGPT, which can provide answers to questions with remarkable accuracy.
Developments surrounding similar technology have also emerged as more organizations try to incorporate AI into their activities to keep up with the changing times. The AI rush has led to huge profits for companies such as Nvidia, which provides chips needed to run the applications.
The demand for chips has seen a 28% rise in Nvidia’s stock price; these chips power generative AI responding to image and text creation. Jensen Huang, the CEO, has attributed the company’s success to artificial intelligence and accelerated computing. This has also led to soaring in the AI-themed crypto market with significant gains over the past 24 hours.
Chip boom boosts AI-related cryptocurrencies
Fetch.ai, dedicated to creating smart autonomous services in travel, supply chain, and more, native currency (FET), with a market capitalization of $195 million, has risen by almost 5% in the past 24 hours.
SingularityNET native coin has also risen to 23 cents, amounting to a 19% according to CoinMarketCap data, a 9% rise.
Measurable Data Token (MDT) rose to 4 cents a coin, a 6.55 rise.CTXC, Cortex native coin, which aims to be the first computer to run artificial intelligence and AI-powered dApps on its blockchain, also rose to 17 cents a coin, a 6% rise. Render Network’s native coin, Render Token, has also risen by 3.31%.
Crypto traders acquired a sentiment boost from Nvidias sales figures issued on Wednesday and the rally in the Nasdaq Composite and S&P 500, citing an AI capabilities demand. The projected sales for Q2 of fiscal 2024 were 50% above the analysts’ expectations.
Blockchain enthusiasts have long believed that this technology can provide digital identity solutions at a scale once AI gets better at manipulating people’s identities. AI can benefit from Blockchain, which may positively impact the crypto market.
The market’s reaction to Nvidias news may be a positive catalyst for crypto mining companies to venture into areas of AI computing to diversify their operations in the bear market. This may occur once they advance their personnel and infrastructure for AI applications.
Nvidia with cryptocurrency
The US chip maker has maintained its position on cryptocurrencies stating that “they do not bring anything useful to society”.This is even after the company’s processors have been extensively purchased in the crypto sector.
Michael Kagan, CTO, has also maintained his position stating that “the uses of processing power such as the ChatGPT chatbot are more beneficial than cryptocurrency mining. In 2021, the company limited its graphic card usage to gamers and AI researchers by releasing software that limited the graphics card’s capability from being used for Ethereum Mining.
Other winners from Nvidias chip boom
Other chip makers, such as Taiwan Semiconductor Manufacturing Co.(TSM) and Dutch ASML, will also benefit from Nvidia’s success. TSM supplies GPU technologies for Nvidia, while ASML manufactures its machines. The CEO’s sentiments have brought more attention to TSMC and ASML, thus experiencing a 12% and 5% rise, respectively, as of 11.28 am on Thursday.
Analysts also predict that cloud vendors could benefit from the company’s success. The spillover already shows this as Cloud Super Micro Computer (SMCI) shares rose over 20% on early Thursday.
Blockchain technology has much potential for AI; AI-corresponding tokens have already begun benefiting from Nvidia’s success. This might be the much-needed catalyst in the crypto market as AI’s machine learning progresses. However, both technologies are still in their early stages; they could be far off.
