Nvidia Stock Drops 35% Amid Bitcoin Treasury Speculation

Speculation has emerged regarding Nvidia's potential addition of Bitcoin to its treasury reserves. These rumors, while unconfirmed, have sparked discussions about the potential benefits and risks for the company. Nvidia, a leader in GPU-accelerated computing, has faced significant economic challenges in recent months, including a substantial drop in stock value and increased competition. These factors have led to speculation that Nvidia might consider diversifying its treasury assets by investing in Bitcoin.

Nvidia has not made any official statements regarding these rumors. When reached for comment, a spokesperson for the company declined to provide any clarification. The speculation highlights the potential impact of such a move on Bitcoin's public perception and the broader crypto market. Given Nvidia's current economic circumstances, an announcement of this nature would not be entirely unexpected.

Over the past five months, Nvidia has navigated various economic and geopolitical obstacles that have impacted its operations and financial performance. Global inflation risks, a weakened US dollar, and increased competition from other GPU manufacturers have all posed significant challenges. Additionally, the company's stock price has taken a hit, falling 35% since its latest price peak in January. Nvidia's stock also reacted poorly to news that China’s Huawei Technologies is testing a new AI chip potentially more powerful than Nvidia’s H100. These circumstances have led to discussions about the potential benefits of diversifying Nvidia's treasury assets, including the possibility of adding Bitcoin to its reserves.

Bitcoin, with its uncorrelated behavior relative to traditional markets and capped supply, presents a strong inflation-hedging opportunity for companies. If Nvidia were to consider this, it would follow a trend established by other companies that have invested in this asset class for similar reasons. For instance, MicroStrategy and Tesla have made headlines by allocating portions of their treasury into Bitcoin, demonstrating that a bold crypto strategy can capture market attention and align a company with forward-looking investors. As of April 2025, companies holding Bitcoin on their balance sheets collectively control over 630,000 BTC, more than 3% of the supply. Nvidia would not be alone in exploring this path.

Such a move by Nvidia would significantly alter how other institutional investors view Bitcoin, potentially encouraging more companies to adopt a similar strategy. The crypto community would likely celebrate the news, believing it would solidify Bitcoin’s legitimacy as an asset class. Holding Bitcoin might broaden Nvidia’s appeal to a new class of investors or partners, attracting interest from the crypto community and younger, tech-savvy investors who see the company as aligned with their values. It could also factor into employee perception, as many tech employees are enthusiastic about crypto, helping to position Nvidia as a forward-thinking, attractive place to work.

Nvidia’s role in the Bitcoin ecosystem, particularly its Proof-of-Work consensus mechanism, is a natural application for NVIDIA’s products. The company is known for being at the cutting edge of tech, including AI and graphics. By adding Bitcoin, Nvidia would reinforce its image of being visionary. Some would say this move leverages NVIDIA’s legacy in the crypto space, as their GPUs were instrumental in cryptocurrency mining during the last decade. There is already a natural link between NVIDIA and Bitcoin, so seeking direct exposure to the asset appears logical. Bitcoin’s hashrate, a key metric measuring the network’s computing power, has been steadily climbing, repeatedly reaching new all-time highs. In that context, NVIDIA backing Bitcoin can also be interpreted as NVIDIA backing its own growth. A rise in demand for GPUs among Bitcoin miners could translate into increased revenue for the company.

However, the extent to which Nvidia requires Bitcoin for stability remains controversial. Nvidia already has other strategies that help the company hedge against volatility and inflation. Adding Bitcoin into the mix may seem excessive. Bitcoin offers diversification benefits as an uncorrelated asset and a potential hedge against long-term dollar depreciation. However, in practice, NVIDIA already uses FX hedging strategies to manage currency risk. The first risk to be weighed must be price volatility. A significant decline in Bitcoin’s price could result in a significant unrealized loss on the balance sheet in the short term. Under current accounting standards, Bitcoin is treated as an “intangible asset,” and the decline would not be amortized, which would have a direct impact on the income statement. As such, Bitcoin might not be the natural choice to defend Nvidia from its current stock declines. An investment of this kind would need to reflect a long-term strategy rather than an impulse decision.

Bitcoin has demonstrated high returns over the long term, though with considerable volatility. For companies able to withstand the associated risks, including large price fluctuations, it offers the potential for significant future profits. Looking at historical performance, Bitcoin has been the best-performing asset of the past 15 years. This makes it, at least on paper, a strategic addition to enhance a company’s treasury. With its substantial financial resources, Nvidia could absorb Bitcoin’s volatility without a major impact on its balance sheet. In this sense, the company has little to lose, but also little to gain. Unless the Bitcoin allocation is significant, the impact on NVIDIA’s long-term share price is likely to be muted. Even Tesla, with over 11,500 BTC, has not been widely reclassified by investors as a crypto treasury play. Ultimately, such a move would likely benefit Bitcoin’s market perception more than NVIDIA’s share price, at least until digital assets are more broadly accepted in mainstream finance.

Nvidia’s decision to invest in Bitcoin hinges on timing and urgency, particularly given recent developments that have alleviated some pressures on the company. Last week, the Trump administration announced its plans to roll back certain Biden-era export restrictions on advanced semiconductor chips. These restrictions, established to enhance US technological leadership by preventing advanced chips from being diverted to countries of concern, especially China, significantly hampered Nvidia’s sales. A rollback would be highly advantageous for Nvidia’s sales, especially amid this new wave of chipmakers. Similarly, the recent US-China tariff pause led to Nvidia’s stock price rise. Despite its temporary nature, the news is a positive sign for the company, promising reduced uncertainty and potential gains in sales and supply chain stability. Considering these developments, adding Bitcoin to Nvidia’s balance sheet may no longer be urgent. If Nvidia were to make such a decision out of haste, it might also drive away traditional investors and long-time buyers. Many areas of traditional finance remain highly skeptical of Bitcoin due to its short history and highly volatile nature. If Nvidia adds Bitcoin as a treasury asset, traditional investors might view it as a poor decision, potentially alienating long-time clients.