I need to see real growth in metrics like customer acquisition and trading volume before making a deeper commitment. From what I can tell, the news about EDXM will only be positive for Coinbase if it helps to expand the pie for the crypto industry as a whole. That's right -- they think these 10 stocks are even better buys. Independent nature of EDXM would also restrain the firm from the possibility of conflicts of interest. EDXM needed to prove its utility to stay relevant within the crypto space though. For now, I'm taking a wait-and-see backed crypto exchange with Coinbase. Meanwhile, the EDX exchange would work to accommodate both private and institutional investors.
So we have a similarity here. The more popular the company the better price for their stocks. But how do you actually buy and sell memes? The phenomenon of buying and selling memes is a bit inaccurate. The term itself was created on the popular website called Reddit, which is exactly what it says it is, the front page of the internet.
With these upvotes, you get Reddit Karma, which you can later use on several pages of Reddit to make posts. For example, if your karma makes you eligible to post a meme, it may not make you eligible to post some type of promotional material somewhere else on the website. Let me show you a meme I made from the format I actually invested in. This meme was born from the latest Youtube Rewind video, which gives you an idea of how versatile the internet can be in adopting memes.
It is called Meme Economy. The karma system has already been explained, but this Meme Economy subreddit has a different take on it. Additional research on different websites can also give you an idea if the meme is going to take off. I already mentioned that it is somewhere around 1 week.
But the Drake format has been alive for a long long time when looking at meme lifespans, which ultimately turns it into a Legacy meme. The memes you need to avoid are the ones that are very easy to utilize. A normie meme is something that everybody uses and most of the outcomes are cringy and not very funny. Normally this happens when you start seeing the meme on social media websites like Facebook. Let me now demonstrate to you the legacy meme, that once was the embodiment of internet creativity and fell victim to the normies, ultimately making it unusable on Reddit, where the actual value is calculated.
The Bad Luck Brian meme was very popular back in the day a couple of years ago when it was widespread for people showcasing their bad luck in various topics. Nvidia is not only suffering from overvaluation problems and a challenging macroeconomic backdrop. The company has entered a severe decline phase, and the market is probably underestimating how serious the situation is for Nvidia.
The company faces several challenging headwinds to its top line, and its bottom line may continue deteriorating in the coming quarters. Therefore, we will probably see earnings estimates and EPS decrease more than anticipated. So, we see that before the recent decline phase Nvidia skyrocketed by nearly 10X in just around two years.
So, what occurred in this time frame? Why did we see such remarkable demand for Nvidia stock? We can point to several elements. Nvidia weathered the coronavirus slow down better than many other companies as much of its gaming business is related to gaming. Then, Nvidia received a post-coronavirus recovery boost as well. The insatiable demand pushed the stock to grossly overbought and ludicrously overvalued levels roughly 40 times trailing sales.
However, what was the true catalyst behind this move? The company claimed that it benefited from surging gaming-related revenues. However, earlier this year, Nvidia settled with the SEC for failing to disclose its cryptocurrency-related sales. A significant portion of Nvidia's GPU sales went towards cryptocurrency mining. Unfortunately, we cannot know precisely how much of the GPU sales were cryptocurrency related as the company did not disclose the numbers.
However, we know that Nvidia's GPUs were widely used in Ethereum and other cryptocurrency mining, but sadly for the company, these sales are ending. However, now the company is reporting sharp drops in sales. Ethereum has been the driver of cryptocurrency-related mining GPU sales in recent years. However, Ethereum is moving away from intensive GPU mining, and the switch from proof-of-work to the proof-of-stake protocol should be complete soon.
Proof-of-stake is far less intensive and requires nothing near the computing power of proof-of-work. Therefore, the Ethereum network will not need a growing number of GPUs. On the contrary, as we advance, there will probably be a remarkably high number of unneeded GPUs.
Another reason why Nvidia's revenues spiked so rapidly was the GPU shortage. Naturally, this phenomenon significantly contributed to the company's skyrocketing revenues. We can presume that this dynamic occurred partially due to the substantial demand from the cryptocurrency segment.
Therefore, Nvidia faces a severe problem. A substantial portion of the company's gains may be gone permanently.
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