Nvidia (NVDA) and Bitcoin (BTC) Don't Have Much in Common, But They Have Both Been Great Investments

Nvidia (NVDA 1.92%) and Bitcoin (BTC -3.60%) don't have much in common, but they have been two of the best-performing investments

Nvidia (NASDAQ:NVDA) and Bitcoin (BTC-1.90%) don't have much in common. But they have been two of the best-performing investments over the last five years, obliterating the S&P 500 (SNPINDEX:^GSPC) index by several orders of magnitude:

NVDA data by YCharts

Had you taken $10,000 and split it equally between Nvidia stock and Bitcoin exactly five years ago, it would be worth a whopping $139,000 today. The same investment in the S&P 500 would be worth just $19,306.

A series of unique tailwinds could drive further upside in both Nvidia stock and Bitcoin this year, but I think one is a better buy than the other. Read on.

1. The case for Nvidia

Nvidia supplies the world's most powerful graphics processing units (GPUs) for data centers, which are used to develop artificial intelligence (AI) models. It recently started shipping its latest GB200 GPU, which is based on the new Blackwell architecture and can deliver up to 30 times more performance (in certain configurations) compared to the company's old flagship H100 chip.

But recent innovations in the AI space have triggered concerns that chip demand could collapse in the future. For instance, a China-based start-up called DeepSeek used a series of clever techniques to train its V3 and R1 AI models with a fraction of the computing power of its U.S. peers like OpenAI, and yet they deliver comparable performance in some benchmarks.

However, many of the industry's top developers are now moving away from traditional pre-training workloads, and allocating their computing capacity to test-time scaling to improve their models instead. This involves an AI model spending extra time "reasoning" or "thinking" during the inference phase before generating a response to a user's query, which means it makes better use of the knowledge it already has.

DeepSeek, OpenAI, Anthropic, Meta Platforms (NASDAQ:META), and more are now focused on developing reasoning models that utilize test-time scaling. According to Nvidia CEO Jensen Huang, these models consume 100 times more compute than their predecessors, which means any drop in traditional training workloads will probably be offset by significantly higher inference workloads. As a result, Nvidia's GPUs should remain a hot product for years to come.

Nvidia recently reported its financial results for its fiscal year 2025 (ended Jan. 26), and it delivered a record $130.5 billion in revenue, which was a 114% increase from the prior year. Over $115 billion of that total came from the data center segment, which represented growth of 142%.

Meta Platforms, Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), and Amazon are some of Nvidia's biggest clients, and they are forecast to spend over $300 billion combined on AI data center infrastructure and chips during 2025. As a result, Nvidia could be set for another big year.

2. The case for Bitcoin

Bitcoin is the world's largest cryptocurrency. In fact, its market capitalization of $1.7 trillion accounts for more than half of the total value of every token and coin in circulation across the entire industry.

Bitcoin's popularity stems from its decentralized structure, its capped supply, and its secure system of record called the blockchain. Those qualities have created the perception that it's a good store of value for investors, so much so that it's often compared to a digital version of gold. That viewpoint was somewhat validated last year when the U.S. Securities and Exchange Commission (SEC) approved dozens of Bitcoin exchange-traded funds (ETFs), giving financial advisors and institutional investors a safe and regulated way to own the cryptocurrency.

The SEC is set to become even more crypto-friendly this year. President Trump appointed Mark Uyeda to run the agency until his official nominee, Paul Atkins, is confirmed by the Senate. Uyeda has already paused active legal cases against crypto giants like Binance, and since Atkins is the co-chairman of an advocacy organization called the Token Alliance, the agency is likely to be more supportive of the industry than ever before when he takes office.

Moreover, President Trump signed an executive order last week that could facilitate the creation of a Strategic Bitcoin Reserve within the U.S. government. For now, it would only hold the $18 billion worth of coins the government has previously seized from criminals, so it isn't a clear-cut fundamental tailwind for the cryptocurrency just yet. However, a strategic reserve might pave the way for the U.S. government to become a Bitcoin buyer on the open market, which would almost certainly boost its value and further legitimize its position as a store of