Buy Bitcoin or buy Nvidia?
Author: Zhu Weisha
On March 14, a reader asked me what I thought about Nvidia's March 11 sharp drop, buy Bitcoin or buy Nvidia?
I have done research on Bitcoin and have no research on Nvidia, so I temporarily looked for information from Nvidia. So research on Nvidia is insufficient. As the leading brother in this round of rising US stocks, it has driven the rise of NASDAQ. Will it take the lead this year? Buy Bitcoin or buy Nvidia? I'm actually asking who is the leader of NASDAQ in 2024.
Calculated based on Nvidia's own data
Nvidia believes that in the next 2024 and 2025, the supply of semiconductors will not be able to meet demand, and Nvidia's expected performance is good. The first quarter results guide for 2024 was $24 billion, up 8.5% from the previous quarter.
Based on this forecast, revenue for the full year of 2024 is about 110 billion US dollars. Using its market sales rate at the end of 2023, that is, the total market value divided by total operating income, and the 1264.5 billion divided by 60.9 billion dollars, the market sales ratio is about 21 times. If it remains the same, the market value can reach around 2.31 trillion dollars in 2024. On March 15, Nvidia reached $2.2 trillion, and there is still room for 5% increase. At this point, we are not far from reaching the peak, and long-term capital will leave the market early. The practice of long-term capital is not to take the last bite. Once it leaves the market, it will not enter in the short term, disrupting the short-term balance of capital. Short-term capital is unable to drive up, and a two-sided pattern appears.
At the time, some people estimated that the market sales rate would rise 25 times in January 2024. At 25 times the market sales rate, the market value for the whole year would reach 275 billion dollars, and there was still room for 25% increase. The rise in the market sales rate indicates that the 2024 performance will grow even faster than in 2023, and the first quarter earnings report is needed to perform. There is no news at the moment. There are differences in the market, which can also explain why the market is afraid to rise. This is also the reason for the sharp drop on March 11, and there may have been a double trend below $1,000, which is a very bad sign of peaking. There will be drastic adjustments if both parties are established. Figure 1 below shows Nvidia's annual chart.
Figure 1
A competitor in Hwang In-hoon's eyes
Companies have rivals. Nvidia's helmsman Hwang In-hoon's opinion on competition is that almost all major companies in the world are doing internal development. Google, AWS, Microsoft, and Meta are all making their own chips. Nvidia GPUs are in the spotlight because it's the only platform open to everyone. A unified architecture covers all areas. Our CUDA architecture can adapt to any emerging architecture model, whether it's CNN, RNN, LSTM, or today's Transformers. Now, various architectures such as Vision Transformers and Birdseye View Transformers are being created, and all of these different architectures can be developed on Nvidia GPUs.
Mr Wong meant they had a competitive advantage.
What does Hwang In-hoon think of the industry as a whole?
Hwang In-hoon said that accelerated computing and generative artificial intelligence have reached a “tipping point.”
As revenue and profit have set records for three consecutive quarters, the fourth quarter results and first-quarter results guidance both exceeded analysts' expectations, and Nvidia's stock price once surged more than 10% after the market.
As an upstream supplier, Nvidia mainly receives orders from downstream manufacturers, and the revenue from these manufacturers mainly comes from end users. We've seen almost all related apps added smart assistants this year, but how many are easy to use? It's still in the “smart useless assistant” stage. It's so beautiful to see what others make, and I just can't handle it myself. I think most users feel the same way about me. The terminal market is still a niche market and cannot support huge investment in artificial intelligence. Accelerated computing chips are used in artificial intelligence servers. I don't understand this, but generating artificial intelligence is a “tipping point” for technology, and the “tipping point” of the market has definitely not been reached.
Sister Mu Dou and Hwang In-hoon have different opinions:
Sister Mu Tou, a famous fund manager, invested in Bitcoin in 2015. Before the coin rose to a record high of nearly 20,000 US dollars two years later, she almost completely reduced her holdings of Bitcoin held by her fund. Sister Mu Tou bought Nvidia as early as 2014, but it was almost sold out before it soared. She was able to measure ahead of time.
She believes that the GPU shortage, which worsened last year with the spread of artificial intelligence tools such as ChatGPT, has now begun to ease. She noted that GPU delivery times are being shortened, particularly at Nvidia, which has been reduced from 8 to 11 months to around 3 to 4 months.
Figuring out the future development of artificial intelligence is the key to Nvidia's valuation
Despite its popularity, artificial intelligence is still at the stage of conceptual products. Manufacturers' (B-side) projects are far less popular than the Internet and blockchain back then, so there was no big bubble back then. End users (C-side), there aren't many applications that the public can master. How will the future unfold? Nvidia's annual Global Developers Conference (GTC) was held on March 19 and is regarded as a grand event for the entire field of AI and deep learning. According to convention, companies will complete important product or technology launches at the conference. After watching the conference, I know what the future holds.
Can Nvidia reach 3 trillion?
Based on the price of 879 US dollars on March 14, there was still a 36% increase until 3 trillion yuan. The rise of Nvidia is artificial intelligence, but artificial intelligence has not been applied as widely as computers and mobile phones. Nvidia does not rely on bubbles but on performance valuation. Artificial intelligence is far from being insane in application. The profit model is unclear, and there are requirements for value return, which will affect upstream supplier Nvidia. Currently, some people predict that Nvidia will reach a market value of 4 trillion US dollars. Unless artificial intelligence explodes, it is impossible. 3 trillion yuan is already a very high annual target.
In summary
Although Nvidia has a competitive advantage in the same industry, artificial intelligence applications have not yet reached the tipping point of the market; GPU delivery times are being shortened, indicating a gradual balance between supply and demand for Nvidia products; artificial intelligence is still at the conceptual product stage and is a “tipping point” for technology, and the profit model is unclear. We look forward to breakthroughs in practical new artificial intelligence products. Artificial intelligence is hot, Nvidia is hot.
Among the trillion dollar clubs, Nvidia is still the most beautiful presence. It won't rise much by 36% in the next 9 months. Buying Nvidia values its low risk and high return; what is likely to surpass it is Bitcoin, a new trillion dollar club. As a long-term investment, the risk is lower and the return is higher.
Bitcoin has low risk and high return
I'm a big friend of Bitcoin, from ignorance to faith to adding value to it. If you have a position, you will be biased; take your own ideas.
After the US approved the Bitcoin Spot ETF, it meant that Bitcoin broke the circle and moved from the niche to the general public. All of Bitcoin's rules have changed. If you stick to the old rules, you'll lose a lot; you'll wake up early in the morning and rush to the evening party like a flatbread. These articles help the group clear their minds from different perspectives. “How high can Bitcoin rise after the US approves the ETF?” , “Why is a Bitcoin ETF the best wealth management product”, “What is the basis for Bitcoin's rise to 3.3 trillion?” , “How to Value Bitcoin”, “J.P. Morgan's opinion that Bitcoin “has surpassed” gold is untenable”, “Before and behind the scenes of the US Securities Regulatory Commission's approval of Bitcoin ETFs” (chainless.hk). The conclusion is directly quoted here.
Compared to Nvidia:
As a cryptographic asset, Bitcoin's value does not depend on the company's performance, so it cannot be directly compared with Nvidia's performance;
The competition in the coin industry has been completed, and Bitcoin is in a proper position;
Bitcoin has no top;
Bitcoin is a mature product; it can be operated by trading stocks; it is easier to use than artificial intelligence;
Bitcoin can be traded globally, not limited to a specific exchange, so its potential customer base is much larger;
Bitcoin can be traded around the clock, while Nvidia's stock trading is limited by the time limit of the exchange;
Bitcoin is an estimate of demand, which only depends on the financial comparison of long and short forces;
To study the comparison of long and short forces, it is necessary to observe the capital inflow of spot ETFs and changes in one-year inventory data;
Bitcoin has just been recognized by the capital market. In the early stages, it is equivalent to the announcement of ChatGPT on November 30, 2022. Nvidia was 165 dollars at the time. By November 2023, it had risen to 460 US dollars, an increase of 2.78 times.
The market value of Nvidia is expected to reach 3 trillion dollars, divided by the total number of shares of 2,464 billion, and the price per share is 1,217 yuan. The entire period is two years and one month, an increase of 7.37 times.
The Bitcoin spot ETF was approved on January 10, 2024. The currency price is 44,670 US dollars. It is also traded on NASDAQ. The conditions are superior to Nvidia in all aspects. There is no reason for the increase to be lower than Nvidia in terms of technical trends. Using Nvidia's increase of 2.78 times Bitcoin's currency price of 44,670 on January 10, the Bitcoin price was 124,200 until December 10, 2024. The price of the currency was 69,000 on March 16, 2024, and there was still an 80% increase. Of course, using Nvidia's data to calculate Bitcoin's market value is undervalued.
Bitcoin's first target is $3.3 trillion
The meaning of the first target is that Bitcoin is the second-largest stored value; the boss is gold. This position is based on a four-year cycle from lowest to highest position. Here is a 10-fold increase pattern. From the lowest point of 16,000 before the halving, to the highest increase after halving is a 10-fold increase. Each Bitcoin is 160,000, multiplied by 21 million, which is 3.3 trillion dollars. After the ETF, the 10-fold cycle should be broken; it will only be higher.
A suggestion to buy Bitcoin and sell Nvidia
My group of friends, a professional investor, gave advice:
Nvidia can't beat the cold from above. You can consider taking part of the take-profit position, allocating Bitcoin instead or looking at the micro “micro strategy” liberal arts interaction (434.hk) of the US stock market (MicroStrategy Mstr.NASDAQ), which is directly related to the value of Bitcoin, and wait until the value rises; the free time can be used to participate in the evangelism and promotion of DavidCoin DW20 to earn more DW coins.
Davidcoin DW20 and Halfini's conjecture
Gold is 13.7 trillion dollars. If Bitcoin rises again and surpasses gold, it will require a new narrative, that is, a new demand factor, that is, the implementation of the Bitcoin standard. This is based on Halfini's conjecture.
In March of last year, I introduced the idea of “Inviting Satoshi Nakamoto to welcome a new era” on Hong Kong Sunshine TV, and I already feel the advent of a new Bitcoin era. Marked by the launch of a Bitcoin spot ETF, as I had imagined, Bitcoin entered the second half. Stored value will allow financial experts to achieve the ultimate, but the specific application of Bitcoin will also need to be expanded. In response, Halfini, one of the founders of Bitcoin, evaluated Bitcoin two days after its launch:
“Bitcoin, if successful, becomes the world's main payment system. And the total value of money should equal the world's wealth. Currently, based on estimates of the total number of households in the world, the wealth I've discovered ranges from $100 trillion to $300 trillion. Corresponding to 20 million bitcoins, the value of the coin is about $10 million”.
In addition to Bitcoin's success, Halfini's vision also requires Bitcoin to become the main payment system. Bitcoin has succeeded. Whether Bitcoin can take over the popularity of AI in the future depends on the application of Bitcoin — becoming the world's main payment system.
The Bitcoin-based idea I designed DW20 comes from Halfini's vision, which means that Bitcoin-based will become the main payment system. This idea took shape in 2023. Simply put, it is to equip Bitcoin with the yardstick it lacks, use Bitcoin to measure global economic development, and use Davidcoin (DW20) to replace stablecoins for everyday transactions. Together, Bitcoin and Davidcoin (DW20) form an inflation-free Bitcoin-based system. If realized, the price increase is as expected by Halfini, and it may make Bitcoin popular all over the place.
The issuance principle of Devicoin (DW20) is the same as Bitcoin. It is a consensus currency, and it also requires the growth process from air to asset coins (stablecoins). The difference is that Davidcoin (DW20) uses an unconditional airdrop method, and anyone who signs up can receive the airdrop for free. The process from air to assets is a process of profiteering. Let's use DavidCoin to get on the Bitcoin shuttle and help Bitcoin at the same time. Today's Davidcoin, like early Bitcoin, is easy to profit only with early participation. The sooner you register, the more likely it is to cross classes. Bitcoin's profiteering era has already been missed. Don't miss out on DavidCoin (DW20). Give yourself a chance to become rich and receive airdrops at zero cost!
APP download link:
https://eco.chainless.top/download?code=8613510870809VJ
You'll get a big red envelope that will go up to tens of thousands of dollars.
For articles on the Bitcoin standard, readers can read it on the official website Chainless.hk (chainless.hk).
Buy Bitcoin or Nvidia
Bitcoin and Nvidia are incomparable. One is based on consensus value, and the other is on performance value. It's just that recently, both players are competing in the investment market, so people can't help but choose it as one of the two or compare its future value. As an investment product, one looks at the extent to which consensus expands in the future, and the other looks at breakthroughs in future performance and position within the industry. If I had to say that it was comparable, it was because of the introduction of Bitcoin spot ETFs. In addition to the consensus mechanism, the future value of Bitcoin is also given the characteristics of Bitcoin stocks, requiring Bitcoin to break through the original stored value consensus and focus on application, that is, to implement the “main payment system” described by Halfini and show the “future prospects” required by the stock market in order to meet the appetite of the capital market and become a long-term leader in the stock market.
Nvidia was popular a few years ago, mainly due to its dominance of GPU graphics cards, including massive adoption in mining industries such as Ethereum. The beginning of 2023 was once again popular due to the rise of AI computing power, which also caused Nvidia's stock price to take the lead. Its market capitalization also became the third after Microsoft and Apple, at close to 2 trillion dollars. But the future of Nvidia's stock price and market capitalization depends on the company's innovation and continued leading position in the industry.
Back to the current stage of investing, whether to buy Bitcoin or Nvidia, depends on individual investment preferences and style. Purely in terms of future profitability, insists on long-term value investment, and has a strong ability to withstand volatility. Bitcoin is more worth looking forward to. Of course, it is not ruled out that after the spot ETF, the characteristics of Bitcoin changed. According to the current opinion of the US SEC, Bitcoin is still defined as a speculative asset. The capital market is forcing Bitcoin to change its characteristics.
For prudent investors, Nvidia may be more ideal because the performance is predictable and has a high degree of certainty. However, stock investment in any secondary market does not depend entirely on the absolute value of the company's performance. It depends more on the expectations of its performance growth. There is also a performance ceiling, and Bitcoin does not have it.
Conclusions:
Steady investors, waiting for Nvidia's stock price to adjust in due course, are optimistic about future intervention and phased operation. For long-term holders, Bitcoin is a better choice. Because Bitcoin is a definite rise.
