Nvidia, the chipmaker known for its AI chips, has seen its stock performance soar, leading to a valuation of $3 trillion. This has sparked a debate among investors about whether Nvidia might be a better investment than Bitcoin.
Over the past year, Nvidia’s stock has surged by over 600%, while Bitcoin has gained 165%. However, Bitcoin’s appeal goes beyond its gains. It has outperformed other investments, including gold and stocks, by a significant margin over the past decade. Even this year, with a 44% increase, Bitcoin remains a strong contender among mainstream assets. But in the past three years, another asset has emerged as a formidable opponent for Bitcoin: Nvidia stock.
The rise of artificial intelligence has had a profound impact on the global tech industry, with major companies like Microsoft, Meta, Google, OpenAI, and Anthropic investing billions in AI integration. Among them, Nvidia has been the biggest beneficiary. As the leading producer of AI chips, Nvidia has played a crucial role in the industry’s growth. At the beginning of 2020, Nvidia’s market cap was $144 billion, but it has since skyrocketed to $3 trillion, making it the world’s third-largest company. It even surpassed Microsoft and Apple to become the largest company globally for a brief period.
Given Nvidia’s impressive rise, many investors are wondering if it is a better investment than Bitcoin. Looking at the past three years, the answer seems to be yes. However, it’s important to consider the context. Can Nvidia sustain its remarkable ascent? Market experts are skeptical and believe that this might be a bubble that will burst sooner or later. History has shown that infrastructure companies like Cisco, which became the most valuable company globally during the dot-com bubble, can quickly fade away when the bubble bursts. Cisco, for instance, is no longer among the top 50 largest companies in the world.
On the other hand, Bitcoin has been on a multi-year trajectory of growth, consistently reaching new heights. Unlike Nvidia, Bitcoin is unlikely to be dethroned by any other cryptocurrency. Currently, Bitcoin’s dominance stands at 53.8%, and even during the altcoin season in late 2022, its dominance only dropped to a low of 38%. Beyond price comparisons, Bitcoin represents something more significant than mere speculation on its price. It offers a new financial paradigm that is not reliant on a few centralized companies controlled by a small number of billionaires. This vision makes investing in Bitcoin much more impactful than owning Nvidia stock.
As of now, Bitcoin is trading at just over $61,000, following a 4.6% loss at the beginning of the week. FxPro analyst noted in a note to investors that there are no significant support levels until the $60,000 range, but after that, it might not be easy for the bears. The next critical area is around $58,000, where the 200-day moving average and the lower boundary of the downward range since March converge.
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