The Crypto Crusher – The Safest Way to Get 1,000+% From Bitcoin True Market Insider I 1

The Crypto-Crusher
The Safest Way to Get 1,000+% Gains from Bitcoin

The Crypto Crusher – The Safest Way to Get 1,000+% From Bitcoin True Market Insider I 2
 Introduction

Digital currencies can be created at any time.

Which is why the number of cryptocurrencies available over the internet is approaching 1,000 and growing.

The most popular and considered the first digital currency is Bitcoin. It also happens to be the most valuable.

In fact, Bitcoin’s market value hit $96.7 billion according to Coinmarketcap.com. Its market capitalization
($109 billion) has now surpassed major stocks such as Goldman Sachs (GS) and Morgan Stanley (MS).

For something that’s virtually created out of thin air and really has no intrinsic value, it’s quite remarkable to
think that, even after it fell from its 2017 highs, people are still paying more than $7,000 (at one point more
than $19,000) to own just one bitcoin.

Of course, many folks have been skeptical of the cryptocurrency “revolution” and think it’ll end very badly
(think “Dutch tulip bulb mania”).

One noteworthy critic was Jamie Dimon, the CEO of JPMorgan Chase, the largest bank in the United States.

“Bitcoin is a fraud,” Dimon famously said in September 2017. “It’s just not a real thing, eventually it will be
closed. Currencies have legal support, it will blow up.”

Mr. Dimon is not the only prominent figure who feels that way.  Ken Rogoff, Professor of Public Policy and
Professor of Economics at Harvard University, thinks that the price of Bitcoin will “collapse.”

“Increased efforts from governments to rein in virtual currencies could eventually contribute to a decline in
speculative interest in the digital asset,” he said.  “The long history of currency tells us that what the private
sector innovates, the state eventually regulates and appropriates.  There’s no reason to expect that virtual
currency to avoid a similar fate.”

Rogoff may be onto something...

Regulators in mainland China and South Korea have more than once begun cracking down on platforms that
allow people to buy and sell digital currency.

China went as far as to ban Initial Coin Offerings (ICO), a relatively new scheme used by startups to raise

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 capital and circumvent the rigors and regulations imposed by venture capitalists and banks.

And while many observers claim that China’s move was more of a “pause” tan a “ban”… It may be only a mat-
ter of time before the lack of consumer protections compels the U.S. government to intervene in the American
cryptocurrency marketplace.

Worse, many legal experts believe that Initial Coin Offerings are in direct violation of the Securities Act of 1933,
which regulates the offer and sale of securities.

Whether that interpretation ultimately holds sway, the lack of regulation on digital currency exchanges does
concern many investors.

In 2014, Tokyo-based Mt. Gox, a bitcoin exchange handled 70% of all Bitcoin transactions worldwide.  It abrupt-
ly suspended trading, closed its website and exchange services and filed for bankruptcy protection.

The company announced that approximately 850,000 bitcoins (an amount valued at more than $450 million)
belonging to its customers had gone missing.  Today, the same amount of bitcoin would be valued at around
$5.5 billion.

Although roughly 200,000 Bitcoins were eventually recovered, account holders suffered heavy losses.  The
exchange and its principles were charged with fraud, embezzlement and manipulating the exchange’s com-
puter system.

Today, with Bitcoin (and other cryptos) bigger than ever, investors would do well to wonder if another Mt. Gox
is waiting to blow up?

Hard to say, but this much is clear.  Digital currencies remain a new frontier… a wild, wild west.  For that rea-
son, the order of the day is caution.

With Bitcoin’s valuation in the neighborhood of $110 billion, it’s likely to attract greater scrutiny from governments,
in particular from the United States, which currently enjoys having the U.S. dollar as the world’s currency re-
serve.

For me, the lack of regulation is the biggest hurdle to directly investing in Bitcoin or any other digital currency.

That said, there are two things that do get me excited about Bitcoin.

One is the underlying technology, called Blockchain.

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 And the other is one particular tech company that sits at the heart of the crypto-revolution.

We call this company “The Crypto Crusher” because, no matter what happens to the price of Bitcoin, or
Ethereum, or any other crypto in the short- to mid-term…

This company should continue to soar.

We’ll look at the technology first. Then we’ll examine the firm.

The Blockchain

It is the technology driving digital currencies that has the real potential to create intrinsic value.  I’m referring
to Blockchain, the software platform at the core of digital currencies.

The Blockchain is basically an electronic ledger that records all Bitcoin transactions.  What makes it an at-
tractive alternative to other traditional payment or transaction systems is that the database is decentralized,
transparent and offers layers of privacy.

Even some of the harshest critics of Bitcoin recognize its value.

In a recent interview, Christine Lagarde, the head of the International Monetary Fund, said “it’s important to
look at the broader implications of technologies like digital currencies.”

She also didn’t rule out the IMF creating its own cryptocurrency to incorporate Special Drawing Rights, a
currency created by the fund to serve as an international reserve asset.

“What we will be looking into is how this currency, the special drawing right, can actually use the technology
to be more efficient and less costly.”

While Bitcoin really rests on no intrinsic value, a digital currency created by the IMF backed by its members’
reserves would have a far more credible standing in the digital marketplace.

Blockchain technology will likely be the next great disrupter to the financial services industry.

Right now, it takes two trading days to settle a stock transaction.  The Blockchain could make possible same-
day settlements.  This would transform how broker/dealers run their back offices.

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 Or take the real estate industry.  If a decentralized ledged of real property can be tracked in a reliable and
transparent manner, the need for title searches and insurance could go the way of the buggy whip.

These are just a couple of examples of how the technology behind Bitcoin could become a transformative
force.

So... How to we play this?

Bitcoin and the rest of the cryptocurrencies need massive computing power to run the Blockchain software.  And
it’s been a great tailwind for semiconductor companies that make really powerful graphic processors.

The “Crypto Crusher”

One of those companies benefiting from the emergence of cryptocurrencies is NVIDIA (NVDA), which cut its
teeth as a manufacturer of graphics chips used in video games.

We’ll dig deep into NVDA in a moment…

For now, know that the company has also been aggressively gaining business in artificial intelligence and
autonomous driving.

And like Bitcoin, NVDA has been on a huge run, up nearly 200% over the past twelve months.

For investors looking to gain exposure to Bitcoin or to the Blockchain technology, we believe that NVDA is a
better way to play it because it provides earnings power and intrinsic value over that of Bitcoin.  NVDA is also
well-positioned to benefit from its other core businesses making it a compelling investment idea.

Let’s look at the company.

Summary

NVIDIA is a relatively young software company that produces digital media processors for a variety of com-
puting platforms.

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 When we take a look at NVIDIA’s one-year price performance, we can see that they have done far better than
others in the industry, particularly in their positive earnings record in recent quarters.

Their hearty performance in emerging industries is not restricted to bitcoin, as they are also making strides in
Artificial Intelligence (AI), driverless car technologies, deep learning and more.

Such positive performance in various industries suggests that their dependence on the declining PC industry
will wane, which bolsters our optimism about their potential growth moving forward. Other positives include
NVIDIA’s contemporary product lineup which includes very strong gaming devices and premium notebook
GPUs. The heightened concentration on GRID platforms will inevitably increase the adoption of GPUs in data
centers, which in turn gives NVIDIA a strong advantage in the market.

Company Overview

Based out of Santa Clara, California, the NVIDIA Corporation primarily provides media processors and similar
software’s for a variety of visual computing platforms. NVIDIA is not only a global leader in the production of
visual computing technologies, but it is actually the creator of the GPU (graphic processing unit) which gen-
erates realistic and interactive graphics on personal computers, gaming consoles, mobile devices, and even
workstations.

This positions the company at the forefront of the industry when it comes to creating digital content, editing
digital images, designing industrial products, and more. The present and future applications for GPU tech-
nology seem boundless. NVIDIA sells their products to system builders, add-in-card manufacturers, original
equipment manufacturers (OEMs), and consumer electronics companies in China, Europe, the United States,
Taiwan, and several other regions in the Asia-Pacific.

Beginning in the fourth quarter in 2013, NVIDIA began reporting under the segments of GPU, Tegra Processor
Technologies, and “All Other” which is mainly comprised of license revenues from their agreements with the
Intel Corporation.

The GPU Business is primarily concerned with high-end graphics for notebook and desktop PCs for their
GeForce line. This generated 84% of their revenue in 2017. The GPU (graphics processing unit) is a small yet
powerful piece of technology that can be integrated into the motherboard or sit directly on top of a video card.

To provide a little more background, the majority of their GeForce GPU’s are sold on a video card, and their
line of video cards has come to be their flagship product line. These are mainly designed for use in the gaming

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 market, which require complex graphics processing.

The Tegra product line functions as a segment of the Tegra Processor Business, and constituted 12% of
NVIDIA’s 2017 fiscal revenue. This segment saw the first Tegra 3 phone to the market in addition to the HTC
One X.

The All Other category generated 4% of their fiscal revenue for 2017.

Why we want to be long-term participants in this megatrend.

Licensing its graphics IP

Licensing its graphics IP will undoubtedly lead to increased revenues.

While it may become increasingly difficult for the firm to sell its expensive yet powerful processing chips,
with competitors like Qualcomm, ARM, and intel entering the market, NVIDIA could shift manufacturing
costs to licensees by licensing the technology.

Moreover, this approach could quicken the rate at which its IP is adopted in the mobile markets.

Shield gaming device.

Built on the Android Jelly Bean software, this gaming device contains a flip-up touchscreen display, analog
joysticks, a directional pad, and buttons.

P2P communication is available as an added bonus via Bluetooth or Wi-Fi connection.

While preliminary designs make the device look a bit bulky, such high functionality at such a fair price point
will make it a true standout in the market.

Other products such as the NVIDIA SHIELD Android TV device, GeForce NOW, and the latest SHIELD
Tablet bolster the company’s relevance in the tech market.

These devices hit all relevant qualifications, such as high definition video streaming features, and plans to
include LTE to be distributed through the AT&T, T-Mobile, Verizon, and Sprint networks. The company’s

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 ability to stay relevant within this segment will be determined by the success of these platforms.

Gaming service providers.

NVIDIA has been securing major market share in the way of gaming service providers.

This serves to strengthen the company’s position not only in workstation-based gaming services, but also
in supercomputing segments.

Advanced gaming cards can also add value to manufacturers of Personal Computers (PCs).

This solid lineup of cutting-edge graphics cards, including the new GeForce GTX 750, GeForce GTX
800M, GeForce GTX 980 and 970 have positioned the company to be considered the leading provider of
graphics cards amongst all PC makers.

According to sources within the company, PC gaming is growing at a CAGR rate of 10% worldwide.

The already strong demand for PC gaming should increase boosting financial performance moving for-
ward. NVIDIA has consistently generated significant revenues from its graphics cards due to their consid-
erably high functionality.

Visual user interface

The key to NVIDIA’s growth may lie in gaming, but as computing becomes more visual, software will
begin to rely more heavily on a visual user interface.

As an example, the Windows 8 platform places a high demand on GPU resources, leveraging high quality
graphics capabilities to improve the overall user experience.

Given the heightened demand for newer tablets in the market, NVIDIA’s High Performance Computing
(HPC) centers are poised to experience major growth in the long run.

Moreover, the company recently unveiled its HPC technology, the Tesla P100 GPU Accelerator, which
provides greater efficiency and performance to enterprise clients at 70% lower operational costs. It also
introduced the Tesla M10 GPU, which streamlines operations by connecting up to 64 users per board.

This lowers the per-user cost of organizations and serves as a major selling point for the product. A steady
launch of new products within their computing segment bodes well for NVIDIA, as they are already seeing

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 an increase in demand for their graphics cards.

New products

NVIDIA has already launched promising new products with several more in the pipeline. At the Consumer
Electronics Show of 2017, NVIDIA CEO Jen-Hsun Huang announced the GeForce NOW and the SHIELD
TV. Also introduced at CES 2015 was the 256-core Tegra X1 processor.

This new piece of technology enables PC and console compatibility, allowing developers to build out apps
that not only run on tablets and smartphones, but also on consoles, televisions, and even cars. Available
in both 32 bit and 64 bit versions, this chip will deliver brilliant graphics with a faster experience for GPUs.

Jetson TK1 platform

What’s more, NVIDIA launched the long-awaited Jetson TK1 platform, targeted for use in robotics, auto-
motive, and embedded applications.

If that wasn’t enough, their Tegra chips are beginning to be utilized in Google’s Nexus 7 device as well as
Microsoft’s Surface tablets.

In fact, Google chose NVIDIA’s Tegra K1 to power the Project Tango development kit, allowing developers
to build applications that feature 3D mapping and have sensing capabilities as well.

The Tegra K1 is also being adopted by Chinese mobile manufacturer Xiaomi for their latest tablet.

In short, the introduction of these revolutionary chips will alleviate current dependence on the PC market.
Product launches such as these, and those that are still in the pipeline, will undoubtedly stimulate growth
for the company.

NVIDIA’s success with the Tegra processor will continue as it is being adopted by Acer for the Chromebook
13, and by Hewlett-Packard for the Chromebook 14. Higher adoption of the Tegra K1 will be a major boost
for business for NVIDIA and provide a competitive edge against the competition, namely Intel and AMD.

Recent alliance with Baidu.

This partnership will bring AI technology in relation to cloud-computing services, home assistance spaces,

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 and self-driving vehicles to the market.

Their agreement stipulates that Baidu will use NVIDIA’s Volta GPU’s in their cloud services, allowing for
real-time interpretation of images, video, text, and speech.

Baidu also has adopted NVIDIA’s DRIVE PX 2 AI, a supercomputer, to be used in their Apollo self-driving
car efforts. NVIDIA will hold up their end of the bargain, which is to use the Baidu DuerOS AI assistant
in their Shield TV product. This deal is clearly a win-win for both companies, and will help both develop
newer, stronger products to bring to market. Furthermore, this partnership will strengthen both parties’
capabilities in different areas -- most notably in the autonomous or ‘self-driving’ vehicle market.

In September of 2016, NVIDIA unveiled a supercomputer chip called Xavier designed for self-driving cars
at their GPU Technology Conference in Amsterdam.

Leading up to 2017, NVIDIA has entered into partnerships with mega players such as Bosch, PACCAR,
HERE, and ZENRIN to name a few. Assured by this unwavering focus on developing and producing new
AI technologies for the self-driving car market, we maintain that the company is braced to experience tre-
mendous growth in the space of driverless technology.

GRID Platforms

The focus that NVIDIA has placed on GRID platforms is anticipated to boost GPU adoption in data cen-
ters around the world, which will provide a great advantage against competitors in the market.

The NVIDIA GRID is a capable GPU-based platform which lends support to virtualized corporate desk-
tops, particularly in data centers.

It also supports cloud gaming services and provides a remarkable visual graphics experience that com-
panies would otherwise have to draw from a dedicated PC, which can be expensive and exhaustive.

A strategic partnership was fostered between NVIDIA and VMware to run the GRID technology on the
VMware Horizon Desktop-As-A-Service (DaaS) Platform. This should result in an enriching of NVIDIA’s
automation, virtualization, and cloud-based portfolios across the board.

It’s our opinion that NVIDIA’s revenues stand to benefit greatly from this, as long as technology meets user
requirements.

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 More recently, the company has unveiled a test drive program under the GRID technology which is
able to support graphics-heavy applications, particularly via cloud computing. This GRID “Test Drive”
allows clients to test Grid-backed VDI, or virtual desktop infrastructure, with ease and without a pilot.

This new program has garnered significant interest which should lead to an increase in demand for the
company’s graphics technology. In fact, a plan for future growth was put forward by the company in a
recent investor meeting, detailing new products and devices which they are planning to launch soon.

According to the company, strategic moves are being made to expand its GRID technology for approxi-
mately 500 million enterprise clients. Lastly, it was emphasized by management that the NVIDIA GRID will
be available on over 50 different server platforms.

In summation, we strongly believe that the GRID, which will advance the visual effects of games, will play
a major role in future revenue for the company as well as margin growth.

Recent Earnings Announcement

NVIDIA is continuing on an earning streak that has spanned eleven straight quarters, and they have just reported
fantastic results for the first-quarter fiscal 2019. Not only did the company mark a strong improvement year-over-
year, but also came out way ahead of estimates. The company has beaten its estimates at every turn.

This graphic chip goliath’s earnings have more than doubled year-over-year to $1.98 from $0.79 per share on
the GAAP basis. The company also reported strong earnings of over $2.05/share on the non-GAAP basis.
This constitutes an increase of nearly 140% from a year ago, when the figure was only $0.85/share. This ro-
bust performance comes primarily from significant revenue growth over the past year.

Revenues

Company revenues experienced a major boom of 66% year-over-year to a reported $3.21 billion, surpassing
several market estimates and projections. This leap can be primarily attributed to steady growth across all
company platforms, such as the GPUs gaming platform, datacenter, Tegra automotive platforms, and Profes-
sional Visualization. Furthermore, NVIDIA gained a great amount of strength in the AI space which also lent a
helping hand to the quarter’s revenues.

“We had a strong quarter with growth across every platform,” said Jensen Huang, founder and chief execu-

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 tive officer of NVIDIA. “Our datacenter business achieved another record and gaming remained strong.”

The GPU segment jumped 77% year-over-year to $2.77 billion in revenue, driven primarily by the GeForce
GPUs Gaming and datacenter revenues.

The Gaming GPU revenues jumped 68% to $1.72 billion year-over-year, driven by a thriving gaming eco-
system, and sustained hype and excitement over their recent GPU launches, naturally growing interest in
e-sports, as well as new tech coming into the space.

By maintaining their focus on introducing innovative and agile products into the space, as well as maintaining
partnerships and agreements with leading game developers, the company has been driving its GPU busi-
ness steadily. In the last quarter alone, NVDIA brought in the Max-Q design standard, which will bring quieter,
thinner, and faster gaming laptops to market. Joining forces with gaming goliaths Activision and Bungie, they
were also able to bring the game ‘Destiny 2’ to PC for the first time ever.

The company’s prized Volta-based V100 accelerator was by far the most buzzworthy launch of the quarter,
providing 10x the deep learning power to the company’s predecessor, known as Pascal generation GPUs. In
their fiscal 2nd quarter, the company shipped da number of these production units which are currently sup-
porting the industry’s two most common and respected AI frameworks -- Facebook’s Caffe and Alphabet’s
Google TensorFlow.

Significant growth in GPU sales for the company is also directly attributable to the increase in demand for
cryptocurrencies such as Bitcoin and new technologies such as Etherium. This has increased demand for
GPU and, in turn, spurred this growth.

In addition to this, datacenter revenues registered at $701 million, an increase of 1.7x higher than last year’s.
This was primarily fueled by the strong focus on adopting AI, deep learning, GRID technologies and high-per-
formance computing or HPC.

The company has also entered into a variety of partnerships and agreements based on its AI technology,
most notably including Baidu, Foxconn, Quanta, Wistron, and Inventec. The overwhelming demand for NVID-
IA’s DGX AI supercomputer was sustained as more and more organizations entering the AI market became
focused on developing AI-enabled applications. The system has been shipped to over 300 clients so far, with
over 1,000 more in the pipeline waiting to be distributed. NVIDIA reports that one of the most notable users
of this system is none other than Facebook.

Solid momentum and progress in its GRID graphics virtualization business led to the company winning sev-
eral contracts, including a deal with Amazon’s ‘Amazon Web Services’ division. Amazon Web Services’ G3

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 now run on the NVIDIA Tesla GPUs.

Revenues for the Tegra processor came in at $442 million, which constitutes an increase of 33% year-over-
year basis. This increase came on the heels of growth that was much better than expected in Tegra devel-
opment services. While automotive business growth remains sluggish, growth for this segment will inevitably
be hampered as a result.

An increase of 3.57% year-over-year brought automotive revenues in at $145 million for the quarter,

Focusing on the Professional Visualization field, we can see that the Quadro brought in revenues of $251
million, constituting a 22.4% year over year increase which is primarily attributed to an increase in demand for
mobile workstations and real-time rendering tools.

Margins

NVIDIA’s overall gross margins increased 64.5% from 59.4%.

Their non-GAAP profits came in at $2.076 billion which demonstrates an increase of 79.8% from this quarter
last year and an increase of 14.8% from the previous quarter. This came mainly on the back of the GeForce
GPU gaming platform strength, but was offset by a loss of business due to the break in action of Intel’s li-
censing agreement.

The company’s non-GAAP expenses jumped 25% to $648 million from the year-ago quarter. This can be
attributed to increased hiring as an attempt to support the company’s growth initiatives. Non-GAAP operating
expenses for the company came right in line with their projections.

Balance Sheet & Cash Flow

NVIDIA closed out the quarter with cash, cash equivalents, and marketable securities of $7.3 billion. Com-
pared with the previous quarter’s $7.1 billion, we can see a total debt for the company of $1.986 billion. Cash
flow from the operations in the first quarter of fiscal 2019 came in at $1.244 billion, with free cash flow coming
in at $471 million.

During the first quarter of fiscal 2019, NVIDIA returned $746 million to shareholders through $655 million in
share repurchases and $91 million in quarterly cash dividends.

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 Guidance

NVIDIA is poised to experience revenues of approx. $310 billion (+/- 2%) for second-quarter fiscal 2019.

The non-GAAP gross margin for the company is expected to come in around 63.5% (+/- 50 bps). The com-
pany’s non-GAAP operating expenses can be expected to come in at around $685 million, and capital ex-
penditures are expected to fall in the range of $130-$150 million. The non-GAAP tax rate is expected to be
around 11% (+/- 1%)

For fiscal 2019, NVIDIA intends to return $1.25 billion to shareholders through ongoing quarterly cash divi-
dends and share repurchases.

Sincerely, Chris Rowe

Founder, True Market Insiders

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