Selling GPUs was successful in the PoW era of Ethereum, but now that Consolidation happens, a lot of GPU owners are losing a lot of money.
Consolidation changed Ethereum’s protocol consensus from PoW to more environmentally friendly PoS. However, it did do some collateral damage along the way. For example, it is hurting GPU companies that are making a lot of money on demand from ETH miners.
Asia-focused media outlet South China Morning Post (SCMP) reported that the Ethereum crisis caused a drop in GPU prices in China, sending sales to “historic lows.” .
Due to low demand from miners, who used to buy expensive cards like Nvidia’s GeForce RTX 3080, RTX 3080 Ti or RTX 3090, vendors had to suddenly cut the price of GPUs by three times what the factories were producing. suggested GPU output.
The most expensive GPUs have dropped more than 37% in price.
Due to low demand from miners, high-end GPUs like the RTX 3080 have dropped more than 37% in the past three months, from 8,000 yuan ($1,140) to less than 5,000 yuan ($712), Peng, a trader at the Shanghai market, told SCMP.
According to Peng, this whole situation could continue due to a number of negative scenarios surrounding the crypto market, such as the crash of bitcoin, the Chinese mining ban, and even the lockdowns. due to COVID, only made the situation worse.
“When the bitcoin mining wave peaked, people from cash-only miners walked into the store and took away all the graphics cards we had in the store […] new computers because of the coronavirus, not to mention those who want to install a new graphics card. “
Another trader named Liu said that Ethereum Merge was the cause of the price collapse of GPUs, because since two months before the start of waiting for Merge, even the cheapest low-end GPUs have started to drop more. 50% causes miners (who can no longer mine ETH) to sell their hardware at a substantial loss.
“I have a customer who bought an RTX 3080 card for 9,400 yuan late last year and now he has to sell it for less than half the price, even though that particular model is not suitable for mining.” .
Ethereum Consolidation Is the Trigger of Low GPU Costs
Cryptocurrency Mining (especially ETH mining) has driven the Price of GPUs over the past few years; however, the price gradually dropped sharply as Ethereum Merge approached.
According to SCMP, graphics card traders at Buy Now, one of Shanghai’s largest local electronics markets, are “remaining on edge” as they witness the excitement of miners after the rush. Ethereum Merge glides past them.
In just a few weeks, Chinese retailers have reduced the suggested retail price of GPUs by more than 33% to sell their devices due to two reasons: The correction of the GPU market and the crypto crisis. In the chart below, the first column shows the name of the GPU and the second to last column shows the difference between the retail price and the factory sale price. All cards are reporting a negative number, which means that GPU traders are trading at a loss right now.
Some researchers estimate that the price of GPUs fell by an average of 10% per week prior to the consolidation. While this “crash” could lead to the closure of many electronics stores, for others it was the end of a two-year nightmare as retailers hiked GPU prices all the way up. level probably due to the high demand they have from miners.
Currently, Gamers, designers, AI programmers, and even astronomers and alien hunters can have a small smile on their faces.