Computing hardware manufacturer NVIDIA is facing a barrage of lawsuits from disgruntled investors, this is after it posted largely negative figures for 2018. The hardware manufacturer builds graphics cards (GPUs) that had been very popular with crypto miners. However, following the extended bull market that was 2018, less miners were building up their mining rigs, causing a huge decline in sales for NVIDIA. The company had promised its shareholders that it had a plan in place for the bear market, but the latest figures show that either this was false or the plan failed miserably.
Crypto Miners “Not Significant”
Early on in 2018, when it was apparent the bear market would roll on for quite some time, NVIDIA allegedly said that it had plans in place and the reduced demand from crypto miners wouldn’t be significant enough to damage financial figures. However, the law firm representing disgruntled investors said:
The Company made false and misleading statements to the market. NVIDIA claimed it monitors the cryptocurrency markets in real-time and rapidly makes the necessary adjustments to its business. NVIDIA also claimed that a drop in demand for its GPUs amongst miners would not have an adverse impact on its business because there is also strong demand for GPUs from the gaming industry.
Join the Lawsuit
The law firm overseeing the lawsuit is encouraging investors who have lot more than $100,000 to join the lawsuit. This could put NVIDIA in a very bad position as it enters 2019, due to the fact that large tech funds hold large positions in the hardware manufacturer.
Mining Slowly Back on Track
It could be a too little too late for NVIDIA, but the crypto mining scene is starting to pick back up after a dismal year. In November 2018 the Bitcoin network hash rate took a massive nosedive, but it appears to be steadily recovering. Unfortunately, mining any of the biggest cryptocurrencies is no longer profitable using GPU rigs, meaning that demand for NVIDIAs GPUs from the crypto mining community may never recover.
ASIC Mining Taking Over
If NVIDIA wasn’t suffering enough, ASIC mining rigs are taking over the mining industry. ASIC rigs can complete more hashes per second, meaning mining running ASIC rigs have more chances of getting the next block reward. Even with the ongoing bear market, ASIC rigs are still profitable to run, another sign that NVIDIAs crypto mining days are long gone.
NVIDIA is in for a world of pain this year and its profitability on the mining front is only going to slide further and further. It’s probably best that GPU manufacturers start focusing on either developing their own ASIC chips to keep up with other manufacturers like Bitfury, or simply stick to building gaming equipment.