Nvidia and Bitcoin Linkage Study—Based on DCC-GARCH Model

Abstract

This article quantifies the correlation between Bitcoin and NVIDIA using the DCC-GARCH model during the period of 2020-2023. We analyzed data from investing.com for this research. Bitcoin is a cryptocurrency based on blockchain technology, which involves mining by solving complex cryptographic puzzles. Mining refers to the process of verifying and recording Bitcoin transactions through computation, and acquiring newly generated Bitcoins as a contribution to network security and the distributed consensus mechanism. Therefore, it is important to understand the correlation between Bitcoin and graphics cards, especially with the expansion of the virtual currency market. Determining the correlation between Bitcoin mining and graphics cards can help miners optimize their hardware choices, investors better understand market potential, and manufacturers produce and develop graphics cards according to market demand. Due to the high computational requirements of Bitcoin mining, traditional central processing units (CPUs) are not well-suited for this task. On the other hand, graphics cards (graphics processing units, GPUs) have become the preferred hardware for Bitcoin mining due to their highly parallel computing capabilities. Consequently, we hypothesize the existence of a correlation between Bitcoin and graphics cards, which is further validated in subsequent sections.