GPU Price Drops 57% Since January As Ethereum Mining Profits Fall

Data shows that GPU prices have continued to decline recently as Ethereum mining profits have declined.

GPU Price Plunges As Ethereum Miners’ Demand Diminish

Data from tech store Tom’s Hardware shows that graphics card prices continued to fall in June, when they fell another 14%.

In 2020, due to a series of factors such as the pandemic and the shortage of chip supply, a new generation of graphics cards was launched into the market with a fairly low inventory and the price then skyrocketed.

Then, as the crypto bull run took hold in 2021, Ethereum mining became lucrative. Miners massively added to the already high demand in the GPU space and the perfect storm to rock the market is over as Nvidia and AMD cards continue to double in price.

This has continued throughout 2021, and card availability wasn’t so bright earlier this year either. However, since the crypto market has seen a series of crashes over the past few months and the shortage has eased a bit, the situation has marked a significant improvement.

Since January 2022, GPU prices have dropped by 57% on average. In June alone, they drop about 14%.

Used GPU prices on sites like Ebay have fallen far more than resale prices. This would make sense since the Ethereum hash rate has recently recorded a decline, indicating that some miners that are no longer making a profit are disconnecting their GPUs and potentially reselling them on sites. resale web.

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Why Has Ethereum Mining Profit Dropped in Recent Months?

There are a few key factors that have caused ETH mining to lose its high returns from 2021. The first and most obvious is  the difficult price of the cryptocurrency. Miners depend on the USD value of their mining rewards as they typically pay their electricity bills and other operating costs in fiat. This year, Ethereum has lost 72% of its value, which means that the income of miners will be significantly affected.

Another reason is that the world electricity price is continuously increasing. Electricity bills typically represent a large portion of miners’ daily expenses, and an increase in electricity prices will lead to lower net profits for them. The impending transition to a proof-of-stake consensus system will obscure miners on the network. This means that mining has a deadline for Ethereum, before which miners must generate a return on investment so as not to lose their coins. Miners in regions with high energy costs may have no choice but to sell their GPUs to repay some of their investment, as they may not turn a profit until PoS appeared.