Boom in the Stock Market for Nvidia shares and crypto mining companies

Yesterday, it was a really good session on the stock market for Nvidia shares and crypto mining companies. 

Actually, in some cases the daily earnings have been really significant, if compared to the average of traditional stock exchanges.

Crypto mining: Marathon’s boom in the stock market and Nvidia’s shares

Probably the most representative stock of the American crypto mining industry is MARA by Marathon Holdings.

Yesterday MARA recorded a sensational +18% daily, although it was mainly a rebound after the losses of the previous days. 

In fact, yesterday’s closing price of 20.6$ is not much higher than the late April peak of 19.8$, and is still significantly lower than the 22$ at the beginning of April. 

The MARA title appears to be very volatile, even more than the price of Bitcoin, despite the company mainly focusing on Bitcoin mining.

The fact is that with the halving of the reward for miners, which occurred on April 20, there were strong doubts about the sustainability of the business of companies that mine Bitcoin.

During 2024, the MARA stock reached an annual peak on February 28th at over $34, but it had already risen above $30 by the end of December 2023. 

Starting from February 29th, it began to decline, despite the peak of Bitcoin occurring on March 14th, precisely due to the doubts about the impact of the halving on its business.

It should be remembered, however, that in October it was just above $7, so since then it has still recorded an incredible +185% in just over seven months. 

Actually in December a mini-bubble inflated that brought the price above $30, and then burst in March with a drop to $14 in mid-April. Since then it simply bounced back above $20.

Other cryptocurrency mining actions

In addition to MARA, you can also analyze the price trend of RIOT stocks. 

Yesterday Riot Platforms’ stocks gained just over 3%, failing to even rise above the $12 from which the descent started at the end of April. 

In other words, while MARA yesterday experienced a real boom in the short term, RIOT’s stocks are showing less volatility. 

The point is that not all crypto mining companies react in the same way to the halving, with some suffering more and others suffering less.

Nevertheless, even RIOT in the last seven months is showing a good +23% increase, although compared to the $18.7 at the end of December 2023, the current price of $10.7 is significantly lower. 

The title RIOT suffered a bit more in March, when it dropped from $18.3 at the end of February to $7.8 in the days just before the halving, but since then it has not dropped to these figures. 

So although the trend may seem similar, there are some significant differences in the performance of various mining companies, depending on how they have reacted to the halving. 

The Nvidia title

Another title that is performing well these days is Nvidia’s.

However, this is a company that operates in a different sector, specifically in the production of chips for artificial intelligence. 

Yesterday it recorded a great +3.7%, but in reality it has been rising since the beginning of May. 

The current value of $921 is not far from the all-time high of $974 in early March, as it has only dropped below $760 in mid-April since then, and then rebounded significantly above $900.

The fact is that in October it was more or less around $400, so in seven months the price of Nvidia shares has more than doubled. 

If we add that in October 2022 it had also dropped below $110, the gain since then has been 670% in just over a year and a half. Not even Bitcoin has managed to achieve such a gain since October 2022. 

The apparent correlation between Nvidia’s actions and crypto mining activities

Although these trends may seem related, they are actually only superficially so due to their dependence on a common underlying dynamic shared by many securities. 

The key point is liquidity, and above all how it moves in the markets. 

After the Fed’s QE of 2020/2021, there is still a lot of liquidity in the markets, but it is not stagnant. 

Although it has decreased slightly from the peak at the end of 2021, there is still a lot of it circulating, and depending on how it moves, it greatly influences the markets and financial assets. 

In particular, for a few months she has been attracted to stocks related to artificial intelligence, such as Nvidia, and those related to crypto markets, such as MARA and RIOT. This is probably also the basis of the crypto bull run that started in October of last year.

So it would be wrong to say that the trend of crypto mining companies going public is correlated with stocks like Nvidia, but they are certainly both similarly influenced by liquidity dynamics, which in turn are influenced by the Fed’s monetary policies and the fiscal and economic policies of the US government.