Selling GPUs was popular during Ethereum’s PoW period, however after the Merge, many GPU owners are suffering significant financial losses.
The Merge switched Ethereum’s PoW protocol consensus to a more environmentally friendly PoS protocol. But along the way, there was some collateral damage. For instance, it is affecting GPU businesses, which were benefiting greatly from the demand from ETH miners.
According to South China Morning Post (SCMP), a media organization with a focus on Asia, the Ethereum implosion prompted a drop in GPU prices in China, which led to sales to their “lowest level in history.”
Vendors have been forced to abruptly lower GPU pricing by three times the amount indicated by the GPU makers due to poor demand from miners who previously purchased pricey cards like Nvidia’s GeForce RTX 3080, RTX 3080 Ti, or RTX 3090.
The Cost of the Most Expensive GPUs Has Decreased by Over 37%.
According to Peng, a dealer at a Shanghai market, high-end GPUs like the RTX 3080 have seen a price decline of more than 37% over the past three months due to poor demand from miners, going from 8,000 yuan ($1,140) to less than 5,000 yuan ($712).
The fall of bitcoin, China’s prohibition on mining, and even the new COVID lockdowns, which have only made matters worse, according to Peng, are just a few of the unfavorable situations Peng cites around the cryptocurrency industry.
“People from the mining businesses just strolled into the stores with cash and took away all the graphics cards we had in stock when the wave of bitcoin mining was at its peak. The coronavirus has prevented anybody from purchasing new PCs, let alone those looking to install new graphics cards.
Since the previous two months, when the wait for the Merge started, even the cheapest low-end GPUs have started to decline by more than 50%, forcing miners (who can no longer mine ETH) to sell their hardware at a significant loss, according to another dealer with the last name Liu.
Even if that particular model is not ideal for mining, I had a customer who purchased an RTX 3080 card for 9,400 yuan late last year and now has to sell it for less than half that amount.
Also Read: Ethereum price
The Ethereum merger was what led to low GPU prices.
Over the past several years, the price of GPUs has been driven up by cryptocurrency mining, particularly ETH mining; but, as the Ethereum Merge drew near, prices started to fall.
Traders of graphics cards at Buy Now, one of Shanghai’s biggest local electronics stores, are reportedly “waiting idly by” while they observe the joy experienced by miners following the Ethereum Merge.
Due to the GPU market downturn and the cryptocurrency crisis, Chinese merchants reduced the suggested retail price of GPUs by more than 33% in only a few weeks in an effort to move their inventory. The GPU’s name is shown in the first column in the graph below, and the difference between the retail and factory prices is shown in the last column. Every card reports a negative value, hence current GPU trading is losing money.
Prior to the combination, some studies calculated that GPU costs were declining by an average of 10% per week. While many e-stores may shut as a result of this “crash,” for others, it marks the end of a two-year nightmare in which retailers artificially increased GPU prices in response to strong demand from miners.
For the time being, it’s possible to see a faint smile on the faces of gamers, designers, AI programmers, even astronomers and extraterrestrial seekers.