Nvidia and Bitcoin: Impressive Performance Amid Market Volatility
Throughout 2024, Nvidia and Bitcoin demonstrated remarkable performance, surpassing the broader market and leaving the S&P 500’s 27% increase in the dust.
Nvidia saw a significant surge of 179.4%, fuelled by its strong presence in AI, data centers, and semiconductor technologies. The demand for GPUs continued to exceed supply, contributing to the company’s impressive growth.
Bitcoin, on the other hand, experienced a rise of 139.8%, driven by two major events: the approval of Bitcoin spot ETFs and President-elect Trump’s positive stance on cryptocurrencies, which included the appointment of a crypto-friendly SEC leader.
The shift towards more supportive regulations, coupled with Federal Reserve Chair Jerome Powell’s likening of Bitcoin to gold, instilled confidence among investors.
Assessing Risks
Bitcoin is currently facing heightened volatility as its recent surge attracts speculative trading. Data from November 2024 revealed a 30% increase in futures open interest, raising concerns about potential liquidation risks during market corrections.
In addition, Trump’s proposed Bitcoin Reserve Act may encounter resistance in Congress, leading to delays in implementation and potentially dampening investor confidence. Regulatory uncertainties persist, particularly regarding the enforcement of anti-money laundering measures.