AMD Notes 'Absence' of Blockchain-related GPU Revenue in Financial Report

Leading computer chip manufacturer, AMD recently announced its “highest profitability” in the past seven years.

However, the California-based tech firm also informed its shareholders on Tuesday (January 29th) that it is expecting significantly lower revenue in Q1 2019 - which may partially be attributed to declining sales of GPUs to cryptocurrency miners.

Last quarter, AMD generated approximately $1.42 billion in revenue, and earned $6.48 billion during FY 2018. In 2017, AMD’s reported revenue was around $5.25 billion. Notably, AMD’s Q4 2018 revenue was about $20 million less than what the company had expected.

AMD Reports "Second Straight Year Of Signficant Revenue Growth"

Commenting on AMD’s revenue and market value, Dr. Lisa Su, the firm’s president and CEO, remarked:

In 2018 we delivered our second straight year of significant revenue growth, market share gains, expanded gross margin and improved profitability based on our high-performance products.

Dr. Su, who earned her Phd in electrical engineering from MIT, revealed that AMD had “doubled” its “EPYC processor shipments sequentially.” EPYCs are proprietary processors manufactured by AMD specifically for datacenters. Additionally, AMD noted in its financial outlook report that it “delivered record GPU datacenter revenue” in Q4 2018.

According to Dr. Su:

Despite near-term graphics headwinds, 2019 is shaping up to be another exciting year driven by the launch of our broadest and most competitive product portfolio ever with our next-generation 7nm Ryzen, Radeon, and EPYC products.

"Absence Of Blockchain-Related GPU Revenue"

The report also mentioned that AMD is expecting around $1.25 billion in total revenue during Q1 2019 (“plus or minus $50 million”). This figure is a “decrease” of about 12% “sequentially” and 24% “year-over-year”, AMD’s financial statement stated.

AMD’s report also revealed that the firm generated almost no revenue from the crypto sector: 

The sequential decrease is expected to be primarily driven by continued softness in the graphics channel and seasonality across the business. The year-over-year decrease is expected to be primarily driven by lower graphics sales due to excess channel inventory, the absence of blockchain-related GPU revenue and lower memory sales.

AMD Accurately Predicts "Near Zero" Revenue From Crypto

In July 2018, AMD had reported that its revenue from the crypto and blockchain industry would likely be “near zero” in Q3 2018. This, after AMD’s earnings from the crypto mining sector had skyrocketed in previous quarters - due largely to the bull market. At that time, Dr. Su had said: 

For Q2 2018, we were approximately 6% of revenue for blockchain. For Q3 2018, we’re planning very little blockchain.

Earlier in October 2017, Dr. Su had predicted that there would be “some leveling-off of some of the cryptocurrency demand.” AMD’s annual 10-K filing (submitted last year) pointed out that “the cryptocurrency market is unstable and demand could change quickly.”

During Q1 2018, AMD earned 10% of its revenue from GPU sales to cryptocurrency miners. As predicted, AMD’s revenue from the crypto sector was “negligible” for the remainder of FY 2018.

Top-Tier Crypto Exchanges' Volumes Climb Back to One-Third of Total Market Share

The aggregate trading volume of top-tier cryptocurrency exchanges has increased by 61.2% during the month of January, while the volume of lower-tier crypto exchanges increased 46.4%.

According to CryptoCompare’s January 2020 Exchange Review, the trading volume of top-tier crypto exchanges – those rated AA-B according to its Exchange Benchmark – climbed last month to represent 29.3% of the total trading volume in the space.

The rise is significant as in December, the cryptoasset data provider’s report showed top-tier cryptocurrency exchanges were seeing their trading volumes drop as they lost market share to lower-tier crypto exchanges, those rated C-F. At the time, they represented 26.4% of the cryptocurrency market’s total trading volume.

top tier trading volumesSource: CryptoCompare Exchange Review

The report further found that exchanges that charge taker fees represented 76% of the total volume last month, while those that implement the controversial trans-fee mining (TFM) model represented 22%.

It also found that regulated bitcoin derivatives are still dominated by the CME, whose total trading volumes went up 145.6% since December. Grayscale’s Bitcoin Trust product (GBTC) saw its total trading volume rise 131% since December.

As for derivatives trading on cryptocurrency exchanges, in January OKEx represented the majority of daily derivatives volumes, trading $4.96 billion per day and capturing 31.1% of the total market share. Huobi traded $4.29 billion a day for 26.9% of it, while BitMEX traded $3.13 billion for 19.6%.

Pure crypto-to-crypto exchanges notably represented 75.4% of the market’s trading volume, in a similar proportion to the last two months. The stablecoin space, per the report, is still dominated by Tether’s USDT, as it still represents 94% of the total Bitcoin trading volume into the top four stablecoins.

Decentralized Exchanges Lose Trading Volume

CryptoCompare’s report also addresses decentralized cryptocurrency exchanges, noting IDEX was the largest one in January. It traded a total of $10 million as its trading volume went up 25.4%, and it was followed by Switcheo and Bitsquare. While these platforms’ volumes went up, DEXs as a whole have been losing volume.

dex CHARTSource: CryptoCompare Exchange Review

According to the report they have diminished 88% since early 2019 to now represent a small fraction of the global spot exchange volume. In January, decentralized trading platform traded $17.8 million in total, representing 0.003% of the market. In January 2019, for comparison, they traded $148 million.

Featured image via Unsplash.