Business & Finance, News

Cryptocurrencies are a modern day gold rush

September 19th, 2017
Author: Economic Voice Staff

By Jordan Hiscott, Chief Trader at ayondo markets:

“Cryptocurrencies are a modern day gold rush…and mining specialists NVidia are reaping the rewards (just like Levi Strauss did in the 1850s)”

During the Californian Gold Rush of the 1850s, the attraction of gold mining was huge yet its ultimate success as an enterprise was part illusion. Those that really made the fortune during the period were the businesses supplying the equipment to dig and mine, namely Levi Strauss and Samuel Brannan.

Arguably, comparisons can be drawn with a gold rush of 2017, namely cryptocurrencies such as Bitcoin. These currencies are creating much fanfare, yet while they may never bear fruit for individuals, those selling the mining and digging equipment, in this case tech company NVidia, are once again reaping the rewards. While the tech giant is well-known within the world of video games, few will be aware of its link to cryptocurrencies, yet the recent success of Bitcoin has led to its shares hitting a new all-time high of $187, with market capitalisation now at $112 billion.

Bitcoin 3 (PD)

Bitcoin has jumped over 300% this year, leading to a huge increase in Bitcoin mining. This is the process where a computer is used to generate a new unique code. The bitcoin miner then sells this in the open market and once the power consumed in the mining process is taken into account, this should, in theory, leave you with a net profit. This requires powerful processing chips and this is where NVidia comes into play.

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Whether the cryptocurrency boom can be sustained remains to be seen. But during a gold rush, history has taught us what side of the trade you need to be on.

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