Rumors swirl about Nvidia potentially adding Bitcoin to its treasury amid stock decline

While unconfirmed, such a move could align with Nvidia's tech-forward image and past crypto ties but brings financial and accounting risks.

Rumors have been swirling in crypto and tech circles about Nvidia potentially adding Bitcoin to its treasury.

While there’s no official confirmation yet, the idea has been fueled by a combination of factors, including Nvidia’s declining stock price amid broader economic pressures and rising competition, particularly from China’s Huawei in the AI chip sector.

After reaching a high of $270 in January, Nvidia’s stock has slid about 35%, a significant drop from its peak. This decline comes amid a broader downturn in tech stocks as rising interest rates and inflation have weighed on valuations for growth companies.

Nvidia is also facing pressure from US tariffs, which are adding to the cost of manufacturing its chips in Taiwan.

Could Bitcoin Be A Strategic Play For Nvidia?

Nvidia is known for its powerful GPUs, used in gaming rigs and, in the past, also a key part of Bitcoin mining. Rumors suggest that Nvidia might be looking to diversify its assets amid a challenging economic climate.

Following a report by BarChart, rumors on social media have been circulating about Nvidia possibly adding Bitcoin to its treasury. However, neither Nvidia nor any executives have spoken publicly about such a move.

Despite the lack of confirmation, the idea of Nvidia holding Bitcoin has sparked discussion among industry experts.

Some believe that diversifying into Bitcoin could help Nvidia navigate the uncertain environment and inflation concerns that are affecting investors’ interest in the company’s stock price.

Nvidia’s stock price is a key focus for investors, and anything that could potentially devalue the stock, such as rumors of layoffs or a broader economic downturn, could quickly sour sentiment.

Bitcoin’s fixed supply and independence from traditional markets could make it an appealing hedge against inflation, something that more companies are considering in the current economic climate.

“It’s no secret that companies are looking for ways to diversify their assets and protect their value in the face of economic uncertainty,” said Banxe CEO Alex Guts.

“With rising inflation and interest rates, institutions are turning to alternative assets, and we’ve already seen several companies add Bitcoin to their treasuries.”

According to Guts, companies now hold over 630,000 BTC in their treasuries, showcasing the growing institutional adoption of the cryptocurrency.

Nvidia’s past ties to crypto mining and its technological innovations in the GPU space could further justify a move into Bitcoin.

Adding Bitcoin to its assets could also help Nvidia appeal to a younger generation of investors and employees who are already knowledgeable about crypto and support such initiatives.

However, there are also financial and accounting implications to consider.

Bitcoin is known for its volatility, which could bring new risks to Nvidia’s financials. Current accounting rules in the US dictate that any gains or losses from Bitcoin would need to be realized in order to be recognized as income or expense.

This means that if Nvidia were to sell Bitcoin at a loss, that loss would need to be booked in the period of sale, even if Nvidia had made gains from Bitcoin previously.

Conversely, if Nvidia were to sell Bitcoin at a gain, that gain would only be realized and recognized in the period of sale.

These rules are in contrast to how Nvidia currently accounts for foreign exchange gains and losses, which are recognized in the period in which the foreign exchange rate changes.

Nvidia already uses foreign exchange hedging to manage inflation risks in the currencies of the countries where it operates.

While diversifying its assets with Bitcoin could help Nvidia mitigate inflation concerns, it may not be a crucial step in that regard.

Dean Chen, founder of Bitunix, said that Bitcoin’s short-term price swings could be damaging rather than helpful for Nvidia unless the company is planning to hold Bitcoin for the long term.

“Nvidia is a tech giant focused on AI and autonomous vehicles, and any move into crypto should align with that broader vision,” Chen said.

“If Nvidia is planning to make a substantial addition to its treasury with Bitcoin, then it should be prepared for some turbulence in the short term, as Bitcoin is known for its volatility.”