Nvidia is predicting a big drop-off in cryptocurrency mining demand

Tech firm reveals revenue generated from crypto-related custom, predicts demand from the sector for its kit will fall significantly in the second quarter of 2018. 

Anyone vaguely interested in buying a graphics card for their PC over the last six months could have probably told you, the  cryptocurrency mining sector’s demand for processing power turned out to be significantly higher than Nvidia expected of late.

The anecdotal evidence, long discussed among gamers, is now borne out by its balance sheets – which report that demand from miners has equalled something like $289m of revenue over Q1 of 2018 alone. However, Nvidia doesn’t think those kind of numbers can be maintained, and is dampening down performance expectations by predicting a demand drop-off in the region of two-thirds during Q2.

Nvidia shares declined around 4% after the results were announced earnings were announced. It should be noted, however, that the drop came from a record high of over $260 per share hit just prior to that.

The revenue details came as part of a wider, positive results release that saw the company announce record results for the quarter. That nigh-on $300m chunk bought in by mining was part of $3.21bn that went through the books during the accounting period, an amount that’s some 66% up on last year. To put demand from the crypto sector into some perspective, Nvidia’s Professional Visualisation activities almost matched it by raking in $251 in that time, while the firm’s datacenter department saw over $700m in revenue. However, it has been mining’s pull on the same resources as Nvidia’s core business, its $1.7bn+ games-related product range, that has made headlines.

Nvidia CEO, Jensen Huang told a conference call on the results that “Crypto miners bought a lot of our GPUs in the quarter and it drove prices up. I think that a lot of gamers weren’t able to buy into the new GeForce as a result.”

The firm’s prediction of a shift away from mining demand, and an admission of its recent impact on its bottom line, comes not long after its rival AMD had sought to play down the influence of crypto mining on its recent results, calling it a “distraction”.