Secretive Chinese bitcoin mining company just revealed a new chip that could hurt AMD, Nvidia

One of Wall Street's biggest worries for AMD and Nvidia just became real.

China-based Bitmain on Tuesday revealed its specialized digital currency mining system for ethereum, which analysts have predicted could hurt demand for graphics cards.

"We are pleased to announce the Antminer E3, world's most powerful and efficient EtHash ASIC miner. Ordering limit of one miner per user and not available in China. Limited stock, order here now," Bitmain tweeted on social media Tuesday.

Bitmain said it will ship its ethereum mining rig in mid to late July for $800 each.

Cryptocurrency miners use graphics cards based on AMD's and Nvidia's chips to "mine" new coins, which can then be sold or held for future appreciation. Digital currency ethereum is up more than 800 percent over the past 12 months, according to Coinbase data.

Bitmain dominates the "bitcoin" industry with its specialized ASIC chips that are more efficient at mining than graphic chips from AMD and Nvidia. Bernstein has said Bitmain likely made as much profit as Nvidiadid last year. Analysts estimate that most of Bitmain's revenue is generated by selling mining rigs powered by the company's chips.

And now Wall Street is concerned the company will dominate the ethereum digital currency mining market.

Susquehanna on Mar. 26 lowered its price targets for AMD and Nvidia shares, citing impending competition from Bitmain in ethereum mining.

The firm estimated ethereum mining-related sales accounted for about 20 percent of AMD's sales and 10 percent of Nvidia's revenue.

The announcement of the new product led to a bad start for AMD's and Nvidia's shares, with the two technology companies launching a downward session that was filled at the end of the deal. Long-term news marked AMD with a significant breakthrough at support level, while Nvidia managed to stay above the main levels of support.

Chart - AMD

Chart - Nvidia

AMD and Nvidia did not immediately respond to requests from comment.

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