Ethereum: basement price, distressed miners: graphics card prices falling

Data show that GPU prices have been falling steadily recently and profits from Ethereum mining are declining. Background: among other things, the weak course of ETH.

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Ethereum Miners No longer Need GPUs: Prices Plunge

Data from Tom’s Hardware technology outlet suggests graphics card prices fell a further 14% in June. In 2020, the new generation of graphics cards came out with a relatively low inventory due to a number of factors such as the pandemic and shortage of chip supply. Prices then rose sharply.

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Then, as the crypto bull run continued in 2021, Ethereum mining became quite lucrative. Miners have already contributed a huge amount to the high demand in the GPU space. Perfect storm for the market as Nvidia and AMD graphics cards have doubled or even tripled in price.

This also continued in 2021. Over-the-top tickets were not available at the beginning of the year either.

However, because the crypto market has seen a series of declines in the last few months and the shortage has diminished slightly, things are much better.

Since January 2022, GPU prices have fallen by an average of 57%. In June alone, they fell about 14%.

Comparison of used and retail prices with MSRP for high – end Nvidia GPUs Source: Tom Hardware

Prices for used GPUs on sites like Ebay fell much more than retail prices. This makes sense as Ethereum hashrate has recently seen a drop. This, in turn, suggests that some non – profit miners are turning off their GPUs and are likely to dump them on resale sites.

Ethereum: Why mining profits fell?

There are a number of key factors that have caused ETH mining to lose its high gains of 2021. The first and most obvious is the flagship price of the cryptocurrency.

Miners rely on the USD value of their mining rewards as they usually pay their utility bills and other running expenses in fiat currency. However, this year alone, Ethereum has lost 72% in value. This means that taken miner income is also a significant hit.

Cryptocurrency price has fallen in recent months Source: ETHUSD on TradingView

Another reason is the rising electricity prices around the world. Electricity bills are usually a large part of miners’ daily expenses. Rising electricity prices result in lower net profits for miners.

The forthcoming switch to the proof-of-concept consensus system is also upsetting the miners in the network. This means that Ethereum mining has a deadline – and before that, miners need to reach ROI so that they do not lose their money.

Miners in areas with high electricity costs may be left with no choice but to sell their GPUs to recoup some of their investment, as they may not be able to make a profit before the advent of PoS.

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Text credit: Bitcoinist