Buy Bitcoin or Nvidia?

On March 14, a reader asked me what I thought about Nvidia’s sharp drop on March 11. Should I buy Bitcoin or Nvidia?

I have researched Bitcoin but not NVIDIA. I looked for information on NVIDIA temporarily, so my research on NVIDIA is insufficient. As the leader in this round of U.S. stock market rises, will it take the lead again this year? Should I buy Bitcoin or Nvidia? We are asking who will be the leader of Nasdaq in 2024.

Calculated based on Nvidia’s data

NVIDIA believes that in the future, 2024 and 2025, the supply of semiconductors will not be able to meet demand, and NVIDIA’s expected performance will be good. The first quarter performance guidance for 2024 is US$24 billion, an increase of 8.5% from the previous quarter.

Based on this, the full-year revenue of 2024 is predicted to be about 110 billion U.S. dollars. Using its price-to-sales ratio at the end of 2023, the total market value divided by the total operating revenue is 1264.5 billion divided by 60.9 billion, and the price-to-sales ratio is about 21 times. If it remains unchanged, the market value 2024 can reach about 2.31 trillion. Nvidia reached 2.2 trillion on March 15, with 5% room for growth. At this time, the peak is not far away, and long-term funds will leave the market early. The practice of long-term funds is not to take the last bite. Once they leave the market, they will not enter in the short term, which destroys the short-term balance of funds. Short-term funds cannot promote the rise, and a two-tops pattern appears.

Figure 1

At that time, some people estimated that the market-to-sales ratio would rise 25 times in January 2024. Based on a market-to-sales ratio of 25 times, the full-year market value would reach 2.75 trillion, and there would still be 25% room for growth. The increase in the price-to-

sales ratio indicates that the performance in 2024 will grow faster than that in 2023, and the first quarter financial report is needed to show it. No news at the moment. There are

 divergences in the market, which can also explain why the market is afraid to rise. This is the reason for the sharp drop on March 11, and below $1,000 could have made a double top, a terrible topping sign. If the double top is established, there will be a substantial adjustment. Figure 1 below is Nvidia’s annual chart.

Competitors in Jensen Jen-Hsun Huang’s eyes

Enterprises have competitors. Nvidia’s helmsman, Jensen Jen-Hsun Huang’s view on competition is that almost all large companies worldwide are doing internal development. Google, AWS, Microsoft, and Meta make their own chips. Nvidia GPUs will be focused on because they are the only platform open to everyone. A unified architecture covers all areas. Our CUDA architecture can adapt to any emerging architectural model, whether CNN, RNN, LSTM, or Transformer. Now, various architectures like Vision Transformer, Birdseye View Transformers, etc. are being created, and all these different architectures can be developed on NVIDIA GPUs.

What Mr. Huang means is that they have a competitive advantage.

What does Mr. Huang think of the entire industry?

Jensen Huang said accelerated computing and generative artificial intelligence have reached a “tipping point.”

As revenue and profits have hit records for three consecutive quarters, and both fourth-quarter results and first-quarter performance guidance exceeded analysts’ expectations, Nvidia’s stock price rose by more than 10% after the market closed.

As an upstream supplier, NVIDIA’s orders mainly come from downstream manufacturers, and the revenue of these manufacturers mainly comes from end users. We have seen that almost all related applications this year have added smart assistants, but how many of them are useful? Still in the “intelligent useless assistant” stage. I see other people making beautiful things, but I just can’t get started with them. I think most users will feel the same way. The terminal market is still a niche market and cannot support massive investments in artificial intelligence. I don’t understand that accelerated computing chips are used in artificial intelligence servers, but generating artificial intelligence is the “tipping point” of technology, and the market’s “tipping point” must not have been reached.

Cathie Wood and Jensen Huang have different views:

The famous fund manager Cathie Wood invested in Bitcoin in 2015. Two years later, before the currency rose to a historical high of nearly $20,000, she almost wholly reduced her holdings of Bitcoin held by her funds. Sister Wood bought Nvidia as early as 2014, but she had basically sold out before the sharp rise. Her lead time was spot on.

She believes that the GPU shortage, exacerbated last year with the popularity of artificial intelligence tools such as ChatGPT, has now begun to ease. She noted that GPU lead times are shrinking, particularly at Nvidia, which has gone from eight to 11 months to about three to four months.

Understanding the future development of artificial intelligence is key to Nvidia’s valuation

Although artificial intelligence is hot, it is still in the conceptual product stage. Manufacturers (B-side) projects are far less popular than the Internet and blockchain back then, so there is no big bubble like that year. For end users (C-side), few applications are available to the public. How will the future develop? Nvidia’s annual Global Developers Conference (GTC) is held on March 19 and is regarded as a grand event in AI and deep learning. As usual, the company will complete important product or technology releases at the conference. After watching the meeting, you know what the future holds.

Can NVIDIA reach 3 trillion?

Calculated based on the price of US$879 on March 14, there is still a 36% increase to 3 trillion. The rise of Nvidia is artificial intelligence, but artificial intelligence has not been widely used, like computers and mobile phones. Nvidia relies not on bubbles but on performance valuation. Artificial intelligence is far from reaching the crazy level of application. The profit model is not transparent, and the value of existence may be returning. The requirements will affect the upstream supplier, NVIDIA. Some people currently predict that Nvidia can reach a market value of 4 trillion U.S. dollars. Unless artificial intelligence develops explosively, it is impossible. 3 trillion is already a very high annual target.

In summary

Although NVIDIA has a competitive advantage in the same industry, the application of artificial intelligence has not yet reached the tipping point of the market; GPU delivery time is shortening, indicating that the supply and demand of NVIDIA products are gradually balancing; artificial intelligence is still a conceptual product stage and a technology “tipping point.” The profit model is not clear. Look forward to breakthroughs in practical new artificial intelligence products. Artificial intelligence is hot, Nvidia is hot.

NVIDIA is still the most beautiful entity in the trillion-dollar club. Buying Nvidia is based on its low risk and high return. Bitcoin, which has recently entered the trillion-dollar club, may surpass it. As a long-term investment, the risk is lower, and the return is higher.

Bitcoin has low risk and high returns.

I am a big friend of Bitcoin, from ignorance to belief to adding value to it. I have a position, will be biased. So you have to make your own decisions.

The approval of the Bitcoin spot ETF in the United States means that Bitcoin has broken out of the circle and moved from the niche to the public. All the rules of Bitcoin have changed. If you stick to the old rules, you will lose miserably. Like Laszlo, you will get up early and go to the late market. These articles help you clarify your thoughts from different perspectives. “How high can Bitcoin rise after the United States approves ETFs?” “, “Why is Bitcoin ETF the best financial product“, “What is the basis for Bitcoin to rise to 3.3 trillion?“, “How to Value Bitcoin,” “JPMorgan Chase’s View that Bitcoin “Has Overtaken” Gold Is Untenable,” “The Behind the Scenes of the U.S. Securities and Exchange Commission’s Approval of Bitcoin ETF” (chainless.hk). The conclusion is quoted directly here.

Compare to NVIDIA:

As a crypto-asset, the value of Bitcoin does not depend on company performance, so it cannot be directly compared with Nvidia’s performance;

The competition in the currency circle has been completed, and Bitcoin is firmly established as the number one player;

Bitcoin has no top;

Bitcoin is a mature product. If you can trade stocks, you can operate it. It is easier to get started than artificial intelligence;

Bitcoin can be traded globally and is not limited to a specific exchange, so its potential customer base is much larger;

Bitcoin can be traded around the clock, while Nvidia stock trading is subject to exchange time limits;

Bitcoin is a demand valuation that only depends on the funding comparison between long and short forces;

To study the comparison between long and short forces, we need to observe the capital inflow of spot ETFs and the data changes in stockpiling for one year;

The capital market has just recognized Bitcoin. In its initial stage, it is equivalent to the release of ChatGPT on November 30, 2022. Nvidia was $165 at the time. It will rise to $460 in one year by November 2023, an increase of 2.78 times.

The Bitcoin spot ETF was approved on January 10, 2024. The currency price is US$44,670. It is also traded on the Nasdaq. The conditions in all aspects are better than NVIDIA. There are no two top in the technical trend, and there is no reason for the increase to be lower than NVIDIA. Multiplying NVIDIA’s increase multiple of 2.78 by the Bitcoin price of 44,670 on January 10, the Bitcoin price on December 10, 2024 will be 124,200. On March 16, 2024, the currency price was 69,000, which may have increased by 80%. Of course, using Nvidia’s data to calculate the market value of Bitcoin is an underestimate.

Bitcoin’s first target is 3.3 trillion

The first target position means that Bitcoin is the second position of stored value, and the first position is gold. This is based on the position that rises from the lowest to the highest in the four-year cycle. There is a 10-fold increase rule. From the lowest point before the halving is 16,000, to the highest after the halving is a 10-fold increase, each Bitcoin is 160,000. , multiplied by 21 million, it is 3.3 trillion. After ETF, the 10-fold cycle increase should be broken and will only be higher.

A suggestion to buy Bitcoin and sell Nvidia

The advice given by a professional investor from my group friend:

Nvidia is too high. You can consider taking profits on some positions and switching to Bitcoin, or look at the US stock micro strategy (MicroStrategy MSTR.Nasdaq), which is directly related to the value of Bitcoin. Like the “micro strategy” of Hong Kong stocks Boyaa Interactive (434.hk), wait for appreciation; the freed time can be used to participate in the preaching and promotion of DW20 and earn more DW coins.

DW20 and Hal Finney Conjecture

Gold is 13.7 trillion. If Bitcoin continues to rise and surpass gold, a new narrative, a new demand factor, will be needed to realize the Bitcoin standard. It is based on Halfinney’s conjecture.

In March last year, I introduced the idea of “inviting Satoshi Nakamoto to welcome the new world” on Hong Kong’s Sun TV, and I already felt that a new era of Bitcoin was coming. Marked by the Bitcoin Spot ETF launch, Bitcoin enters its second half as I envision it. The stored value will let financial experts play a good role, but it will also require the expansion of specific applications of Bitcoin. In this regard, Hal Finney, one of the founders of Bitcoin, commented on Bitcoin two days after its launch:

“As an amusing thought experiment, imagine that Bitcoin is successful and becomes the dominant payment system in use throughout the world. Then, the total value of the currency should be equal to the total value of all the world’s wealth. Current estimates of total worldwide household wealth that I have found range from $100 trillion to $300 trillion. With 20 million coins, each coin has a value of about $10 million.”

In addition to the need for Bitcoin to succeed, Hal Finney’s vision also calls for Bitcoin to become the dominant payment system. Bitcoin has been successful. Whether Bitcoin can take over the popularity of AI in the future depends on its application — becoming the world’s primary payment system.

The idea of the DW20 Bitcoin Standard that I designed comes from Hal Finney’s vision, which means that Bitcoin Standard will become the primary payment system. This idea took shape in 2023. Simply put, it is to equip Bitcoin with the ruler it lacks, use Bitcoin to measure global economic development and use DW20 to replace stablecoins for daily transactions. Bitcoin and DW20 together form a non-inflationary Bitcoin-based system. If realized, the price increase expected by Hal Finney may make Bitcoin hot popular.

The issuance principle of DW20 is the same as that of Bitcoin. It is a consensus currency and also requires the growth process from air to asset currency (stable currency). The difference is that DW20 adopts an unconditional airdrop method. Anyone who registers can receive free airdrops. The process from air to asset is a process of huge profits. Let us use Dw20 to catch the Bitcoin shuttle bus and help Bitcoin simultaneously. Today’s DW20 is like early Bitcoin. Only early participation can make profits easily. The earlier you register, the more likely you will achieve a class leap. Bitcoin’s era of huge profits has been missed. Don’t miss out on DW20, give yourself a chance to get rich and receive airdrops at 0 cost!

APP download link: https://eco.chainless.top/download?code=8613510870809VJ

you will receive a big red envelope that will rise, possibly to tens of thousands of dollars.

For articles about Bitcoin standards, readers can visit Chainless’s official website (chainless.hk).

Should I buy Bitcoin or Nvidia?

There is no comparison between Bitcoin and NVIDIA. One is based on consensus value, and the other is based on profitability. But recently, due to the two heroes advancing together in the investment market, people can’t help but choose it as an alternative or compare its future value. As an investment product, one depends on expanding future consensus, and the other relies on the breakthrough of future performance and its position in the industry. If there is any comparability, it is because of the launch of Bitcoin spot ETF. In addition to the consensus mechanism for the future value of Bitcoin, spot ETFs also give Bitcoin stock characteristics, requiring Bitcoin to break through the original consensus of stored value and focus on application, that is, to achieve what Hal Finney said is the “main payment system,” showing the “future prospects” required by the stock market in order to meet the appetite of the capital market and become the long-term leader of the stock market.

Nvidia has been popular in the past few years, mainly because of its dominance in GPU graphics cards, including its large adoption in mining industries such as Ethereum. Starting in 2023, the rise of AI computing power has become popular again, which has also caused Nvidia’s stock price to skyrocket. Its market value has become the third largest after Microsoft and Apple, approaching 2 trillion. However, the future of Nvidia’s stock price and market value depends on its company’s innovation and continued leadership in the industry.

Returning to the current investment stage, whether to buy Bitcoin or NVIDIA depends on personal investment preferences and styles. From a pure perspective of future profitability, if you insist on long-term value investment and strongly tolerate volatility, Bitcoin is more worthy of looking forward to. Of course, it is not ruled out that the characteristics of Bitcoin will change after the spot ETF. According to the current view of the US SEC, Bitcoin is still defined as a speculative asset. The capital market may force Bitcoin to change its characteristics.

For prudent investors, Nvidia may be ideal because its performance is predictable and highly certain. However, any stock investment in the secondary market does not entirely depend on the absolute value of the company’s performance but more on its performance growth expectations, as well as the influence of many other factors, and has its own performance ceiling, which Bitcoin does not have a ceiling.

In conclusion:

Steady investors wait for NVIDIA’s stock price to adjust in due course, are optimistic about the future, and will intervene in stages. For long-term holders, Bitcoin is a better choice because Bitcoin’s rise is a certainty.

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