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How is The Ethereum Merge Impacting NVIDIA Stock?

In recent Ethereum News, implications of ‘The Merge’ are considered on a more granular level. The Ethereum Merge has been ongoing in live phases since December 2020, when the Beacon Chain was announced and released to the public. In brief, the public release of the Beacon Chain allowed staking to begin on the next generation of the Ethereum blockchain, aided in part by its fundamental PoS processing. This move was necessary to move onto the second phase of the launch, expected on or around September 19.

At its fundamental level, the Ethereum Merge is mostly about the transition of the network from Proof-of-Work (PoW) to one which is fully Proof-of-Stake (PoS). The move offers considerable promise for the future of the Ethereum network, with regards to enhancing energy efficiency, speed, and scalability of the blockchain in specific. What has not been so widely reported are potential elements that may be adversely affected by ‘The Merge.’ In recent days and weeks, one of those possibly adverse effects has come to light more than ever before.

How Are NVIDIA And Ethereum Related?

NVIDIA is a publicly traded US-based tech company which manufactures gaming and computer software components, namely graphics cards. One of NVIDIA’s products of highest demand are chips produced under the caveat of gaming. However, the processor chips really aren’t believed to be used in gaming at all. In February 2021, they were instead released with messaging and press that obviously targeted Ethereum miners.

NVIDIA processor chips were designed to enhance the experience of miners on the Ethereum blockchain network, and seemed to work well, since the price of the NVIDIA stock began to soar as the company found a home with Ethereum miners. The issue now is that the NVIDIA stock has begun to see tremendous amounts of pullback, and even a full on downtrend amidst ‘The Merge.’ It’s no way to put it lightly, but after September, when Ethereum is expected to complete its merge with the launch of its mainnet, the chips used for the old PoW Ethereum blockchain will be all but useless to the mining community who will switch over to PoS to complete network validation.

What Is Expected To Happen With NVIDIA Stock?

It is hard to say what the outcome will be for the processing chip maker. NVIDIA chose to make its chips specially formatted to be used in the Ethereum mining process, and therefore created a barrier whereby Bitcoin miners have to get specially produced chips for its miners to satisfy mining requirements on the network. NVIDIA claims a decent portion of its revenues are from other business related to gaming, but the latest revenues showed the decrease in the bottom line of the company to be significant, even with greater than 60% increases shown in its revenue streams from business in the data center sector.

With losses shown in the billions after the cool-down on the Ethereum chips sold by NVIDIA, there is no way of telling for sure just what will come of the tech company, or what products they may be able to introduce to the market in the loom of the completion of the Ethereum 2.0 merger. For now, a greater amount of attention than usual will be on the NVIDIA stock and business ecosystem as Ethereum progresses towards the phase 2 completion of its Merge.


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