For most of last year, it was not uncommon to see GPUs sell hundreds of dollars above their suggested retail prices.The lack of units led to some Ethereum miners mining using laptops.. However, that trend now seems to be reversed as demand for Ethereum miners is declining.
GPU or graphics card prices have been declining slowly and steadily since at least the beginning of 2022.
Mark D’Aria, CEO of Bitpro Consulting, a second-hand GPU retailer, said prices have fallen by 3% to 4% each week since the beginning of the year.
The company tracks selling prices for over 40 GPU models, from low-end to very high-end. According to data shared with The Block, the index averaged $ 760 on December 5th and $ 453 on April 17th.
“The basic thing we’re looking at here is the shift in demand from miners,” Dalia told Brock. High Ethereum mining revenue helps explain why the industry “fully” controlled the prices of these GPUs in 2021, but a few years ago there was “little demand” from miners. He explained.
Ethereum’s mining revenues reached a record high of $ 2.4 billion in May 2021, according to data compiled by The Block Research.
However, that number has declined since November last year and recovered slightly in March and April 2022. In the meantime, the network has approached a switch to a proof-of-stake consensus mechanism that does not require a GPU.
Ethereum’s hash rate growth stagnated significantly in 2022 as a result of miners’ reductions in investment and as a result of “selling pressure,” said Ethereum, COO of Luxor, which operates the Ethereum mining pool. rice field. Pools allow miners to provide hash power in bulk, increasing the likelihood of detecting blocks together.
According to data from The Block Research, Ethereum’s hash rate increased by approximately 604.72 tera-hashes / second (TH / s) between January 1, 2021 and January 1, 2022. It has been on the rise for the past few months, but is slowing down. Between January 1st and May 2nd, the hash rate increased by 106.94 TH / s.
According to Vera, funding is also difficult given the future uncertainty of Ethereum.
“The capital markets are different from Bitcoin, which has an appetite for these machines. We are confident that the capital flowing into the space has cooled down here in the first quarter of 2022,” he said.
Promotion for sales
The transition from Ethereum’s Proof of Work to Proof of Work has been in place since 2016 and has been postponed many times, but the developers are Succeeded in testing Proof of Stake on the mainnet last month. Tim Beiko, Ethereum’s core developer, recently said the “merger” is likely to occur months after June.
“We don’t have a fixed date yet, but we’re definitely in the final chapter of the Ethereum POWs,” he says. I wrote on Twitter Early this month.
The shift eliminates the need for the GPU. Proof of work requires miners to solve complex mathematical problems, while proof of work allows so-called validators to bet ETH to join the system and randomly select to create new blocks. ..
Bella said that most of the hardware used in Ethereum mining, at least in the short term, would be useless in Proof of Stake, but in the end, miners will find a way to reuse the GPU. Probably.
“It will be difficult for Ethereum miners to liquidate GPUs at a reasonable price if changes are made quickly, as the market can be flooded,” Vera said. “I think these GPUs can be reused in the medium to long term.”
Some things seem to be pushing down the price.
“There are certainly a lot of elements combined here,” said D’Aria. “The supply chain seems a bit clearer, at least in the sense that it’s easier (in a sense) to get a new GPU. Many of them have few miners buying everything from the shelves as soon as they hit the shelves. I think.”
According to the data compiled by D’Aria, the amount of money each GPU can generate is also consistently decreasing.
“Since the beginning of this year, on average, people have lost more money in net, even after they have mined. Many people were really surprised to hear that and I gave them numbers. I don’t believe in me until I show it, “he said. “Anyone who owns a GPU made a mistake. They should have sold January 1st.”
Dahlia said different miners are taking different approaches. Some are trying to market their GPUs before the market floods, others are waiting for what will happen, while others continue to build mining rigs.
Weather may also play a role in facilitating these trends. The closer you get to the warmer months, the harder it is to run your GPU in the heat outside.
“There are many factors that drive people to sell, but so far there aren’t many factors that drive people to buy,” said D’Aria.
On the other hand, Vera believes that GPU prices are falling primarily due to lack of demand in the supply chain or other categories.
According to D’Aria, this is the high-end part of the GPU market, which is primarily influenced by Ethereum miners. As a result, the prices of more expensive machines are falling slightly faster than those of more affordable machines, he said.
“These super high-end GPUs were in much greater demand, which gamers never wanted to pay so much on average,” he said. “The miners are willing to pay any costs, so Nvidia sold far more 3090s than just sold to gamers (…) There was this huge amount of really high-end cards.”
As an example, the RTX 3080 sold for about $ 1,942 on December 5th and $ 1,082 on April 17th. Data of D’Aria. On the same day, the RX480 went from $ 240 to $ 144. D’Aria said the price of new GPUs in the retail market closely follows the price in the secondary market.
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D’Aria also argued that some miners continuing to build had the false belief that Ethereum could proceed to mine other coins after moving to Proof of Stake. In fact, he explained, when the hash rate shifts to other coins, profitability drops sharply.
“Even if you have free electricity, it’s doubtful that this is even worth your time,” he said. “What these new amateur miners don’t understand is that Ethereum is currently 97% of all GPU mining revenue.”
Similarly, Vera said that as hundreds of thousands of GPUs move to mining other coins such as Ravencoin, “profitability per computer unit will drop significantly.”
Based on the pool of hash power available, Vera estimates that the total number of machines currently protecting the Ethereum network is approximately $ 11.4 billion. The numbers are categorized as $ 3 billion for older GPUs, $ 7.3 billion for newer generation GPUs, and $ 1 billion for ASICs.
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