Nvidia Delivers, Bitcoin Doesn’t React

With every Nvidia earnings release, the crypto market holds its breath. For several quarters, the semiconductor giant’s performance seems to evolve in parallel with that of bitcoin. Enough to intrigue traders, increasingly watching this quarterly event as a leading indicator. Even before the announcement of the second quarter, attention was not only on Wall Street but also on the blockchain order books.

Nvidia in the spotlight : an eagerly awaited announcement by crypto traders

While Nvidia, the first listed company to reach $4 trillion, published its quarterly results on Wednesday, August 27 after the US markets closed, investors’ attention was not limited to Nasdaq. The options market anticipated a significant move: an implied volatility of 6.1 %, representing a potential $270 billion change in market capitalization, according to The Kobeissi Letter.

Despite the size of this figure, it is actually the lowest volatility expected since May 2023. For this quarter, analysts forecasted an adjusted profit of $1.01 per share and estimated revenues at $46.2 billion, confirming the colossal weight of the group. Nvidia, now boasting a record valuation of $4.4 trillion, asserts itself more than ever as a leading indicator of overall tech sentiment.

This release triggered particular interest within the crypto community due to an intriguing historical correlation. Bitcoindata21 indicates on the social network X that “Nvidia’s financial results have historically coincided with bullish bitcoin performance”.

https://twitter.com/bitcoindata21/status/1960651079865000316

Since 2023, the bitcoin price has reacted positively in 7 of the 10 quarters following Nvidia’s earnings releases. This phenomenon, which does not rely on any clear structural link between the two assets, nevertheless provokes hypotheses among market observers. Here are the concrete elements identified :

• A repeated temporal correlation : 7 BTC rises out of 10 quarters after Nvidia’s earnings ;

• Increasing sensitivity of the crypto market to macro-technological signals ;

• The indirect role of Nvidia in the blockchain and AI ecosystem, via its chips used in Web3 projects or for GPU mining ;

• The psychological weight : the performance of the global semiconductor leader influences the overall sentiment of risky assets, of which cryptos are an integral part.

A solid release, a timid crypto reaction

Nvidia ultimately exceeded consensus expectations, with a 56 % increase in revenues. Yet, the markets did not react as investors had hoped. NVDA shares dropped 1.7 % after the release. A moderate decline, but out of step with the enthusiasm that the expectations suggested.

Bitcoin, Ether, and XRP showed some volatility after the report, but no clear net movement. Even AI-related tokens remained generally stable, despite their potential exposure to Nvidia’s performance.

This gap between strong released results and the lack of reaction in the crypto market contrasts with previous quarters. While the past correlation between Nvidia’s results and the price of the flagship crypto remains statistically valid, it did not manifest noticeably this time.

It is possible that investors had anticipated these good results, already pricing them in, or that some caution dominates in an uncertain macroeconomic context. Moreover, another hypothesis is a temporary fatigue of the narrative around artificial intelligence, which until now had acted as a transversal catalyst between tech and crypto markets.

Nvidia’s solid figures thanks to a historic stock market high have not, for the moment, revived bitcoin’s bullish momentum, despite a historical correlation. If signals from tech can influence the crypto market, they do not steer it alone. It remains to be seen if this status quo persists or if a delayed new alignment could establish itself in the coming days.