Written by: Eric, Foresight News
In 2017, the cryptocurrency market was experiencing a booming bull market.
Recently, Jensen Huang has been dominating headlines worldwide. During NVIDIA's earnings call that year, he stated, "Cryptocurrency and blockchain will exist in the long term, and (the scale) will become very large... GPUs are well positioned in this regard."
According to NVIDIA's past earnings data, until 2023, revenue from data centers within NVIDIA's chip business first exceeded that of gaming. Prior to that, gaming graphics cards and professional visualization tools were NVIDIA's main businesses, but during those years, Ethereum mining, which had a low market share, frequently impacted NVIDIA's stock price.
The Ethereum Bear Market Caused NVIDIA to Lose $20 Billion
In March 2018, Jensen Huang had just celebrated his 55th birthday. During an interview on CNBC's "Mad Money," he reiterated what he said in the previous year's earnings call: "Cryptocurrency will exist. The world will have a frictionless, low-cost method of value exchange, and this method will exist in the long term."
He also stated, "Blockchain will exist in the long term; it will become a new form of fundamental computing. I expect blockchain and cryptocurrency to be significant driving forces for GPU development."
During those two years, JPMorgan's CEO publicly called Bitcoin a fraud and stated that he would fire employees trading Bitcoin; Buffett repeatedly indicated that cryptocurrency would have a "bad ending"; AMD, to some extent, benefited from mining but cautiously stated that "mining will not be a long-term growth driver."
Looking at it now, Huang can also be considered a "small Musk."
In 2016 and 2017, thanks to rapid growth in gaming and data center businesses, NVIDIA's stock price rose by 224% and 81% respectively over those two years. But just as Huang was immersed in the surprises cryptocurrency could bring him, reality struck first. In 2018, cryptocurrency prices plummeted across the board, with Bitcoin dropping from nearly $20,000 to less than $4,000, and Ethereum even falling from four digits to two.
In August 2018, NVIDIA announced its mid-year earnings, revealing that revenues from cryptocurrency-related products plummeted from $289 million in the previous quarter to just $18 million. The company clearly stated that the crypto contribution could be ignored in the second half of the year, and NVIDIA's stock fell about 5% after hours. In November of the same year, NVIDIA released its Q3 earnings report, with the quarterly revenue falling short of expectations. More crucially, the guidance for the next quarter was significantly below Wall Street expectations (approximately $2.7 billion vs. an expectation of $3.4 billion). Huang clearly attributed the reason to a "crypto hangover" that was longer and more serious than anticipated.
On the trading day following the release of this earnings report, NVIDIA's stock price fell by about 19% compared to the previous trading day's close. A mining business that accounted for only single digits of total revenue forced NVIDIA's market value to evaporate by over $20 billion in a single day.
From "a thing of the past" to "dedicated mining machines"
In March 2019, Jensen Huang attempted to completely distance NVIDIA from cryptocurrency during a press conference in Tel Aviv, Israel. He stated to the media that NVIDIA "never planned for cryptocurrency; cryptocurrency found us, and it has become a thing of the past." He acknowledged that cryptocurrency technology has its own value in some aspect, and even hoped that the blockchain world could find algorithms with lower computational intensity, so that GPUs would no longer be the focal point for miners.
Clearly, Huang was significantly affected by the dramatic fluctuations in cryptocurrency. But just two years later, things took a turn again.
In the second half of 2020, Ethereum prices soared, and NVIDIA's gaming graphics cards once again became a hard currency in the eyes of miners. The RTX 30 series was in high demand, causing players to complain they were being pushed out of the market. It was common to see news of internet cafes being exclusively rented for mining. However, due to the previous bear market, miners struggled to find stable supply sources, leading to skyrocketing retail prices and prolonged shortages on e-commerce platforms. Gamers either had no graphics cards to use or purchased already "cleaned out" "mining cards." Social media was filled with anger directed at NVIDIA.
Huang realized that simply pretending cryptocurrency did not exist could no longer solve the problem. In February 2021, NVIDIA officially launched the Cryptocurrency Mining Processor, known as the CMP series. This was a set of devices designed specifically for professional mining, without display output, optimized for airflow, and supporting multi-card high-density deployment.
This may not have been Huang's reconciliation with cryptocurrency but rather a hope that the main business would not be affected. The evidence lies in NVIDIA's implementation of driver-level restrictions on the RTX 3060, reducing its Ethereum mining power by approximately half through the LHR mechanism, attempting to use technical means to physically separate gamers and miners into two channels.
At that time, a single command from Huang could make the Ethereum mining community tremble. Although Bitmain also had Ethereum mining machines, and AMD's graphics cards had even higher mining efficiency, NVIDIA's machines were always the first choice due to their supply and product stability.
The market initially reacted enthusiastically to CMP. In the first quarter of FY 2021, CMP series revenue exceeded $155 million. NVIDIA optimistically expected revenue in the next quarter to reach $400 million, but the actual situation did not fully deliver on this ambition, with second-quarter revenue around $266 million. By the third quarter, this number decreased to $105 million.
Overall, CMP generated approximately $526 million in revenue for NVIDIA over the entire cycle. Canadian mining company Hut 8 even ordered $30 million worth of CMP equipment from NVIDIA. Later, NVIDIA even launched the high-end CMP 170HX, with an Ethereum power of about 164 MH/s, priced above $4,000, but with very limited supply, resembling more of an experimental product aimed at top mining farms.
With the launch of dedicated mining machines, Huang's attitude towards cryptocurrency took a 180-degree turn again. During an interview with VentureBeat at Computex 2021, when asked whether he was excited about Ethereum transitioning to proof of stake, he gave an affirmative answer. In his view, Ethereum has established its position, possesses reliability and credibility, and many applications like DeFi rely on its network, so the shift to PoS is a natural upgrade.
He believes Ethereum has high long-term value, and transaction processing speeds are expected to improve significantly. He candidly stated that cryptocurrency will continue to exist. He also mentioned that Ethereum's current popularity might cool off after a year, but mining itself will not disappear. Additionally, he believes the reason Ethereum chose GPUs is that GPUs constitute the largest programmable distributed supercomputer network in the world.
In September 2022, the Ethereum merger that excited Huang was completed, causing GPU mining demand to collapse overnight. Global mining farms shut down, and a flood of second-hand graphics cards hit the market, reversing the situation where a single card was hard to obtain into one of inventory surplus. NVIDIA's Chief Financial Officer had to acknowledge in subsequent earnings reports that the Ethereum merger negatively impacted demand for some products.
However, starting in 2022, the data center business gradually became the core of NVIDIA, and the discontinuation of mining products had little effect on NVIDIA. It was also after this that NVIDIA officially parted ways with cryptocurrency.
AI and Crypto
If Huang does not face issues, we may see a third turnaround in the future.
Payments based on x402 and stablecoins are recognized as the best current solution for Agent payments, and "AI + Crypto" projects now hold a place in the Web3 market. In March of this year, at the NVIDIA GTC 2026 conference, during a conversation with Chamath Palihapitiya, the host of All-In Podcast, when asked about Huang's views on Bittensor training low-parameter large models through distributed computing power, Huang replied that this is a modern version of "Folding@home," stating that open source/decentralized models and closed-source models are a complementary relationship of "A and B."
Huang's endorsement caused the TAO token to briefly surge over 20%, with many on X expressing surprise that Huang himself unintentionally endorsed a crypto project.
With the ongoing development of AI, stablecoins or other cryptocurrencies may indeed become the currency for transactions between agents in the silicon age. While Huang could have continued to expound on this, even if he has the opportunity to revisit this topic in the future, he is unlikely to do so as the CEO of NVIDIA and will not be on the stage built by NVIDIA.
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