Data indicates that GPU prices have been declining recently as Ethereum mining revenues have been declining.
GPU costs drop as ethereum miners’ demand declines
According to data from the tech publication Tom’s Hardware, the price of graphics cards continued to decline in June, falling another 14%.
Due to a number of causes, including the pandemic and a lack of chips, the new generation of graphics cards launched in 2020 with relatively little stock, which caused prices to rise.
Ethereum mining then got highly profitable in 2021 as the crypto bull run continued.
GPU prices have decreased by an average of 57 percent since January 2022. They decreased by nearly 14 percent in June alone.
Prices for secondhand GPUs have decreased far more on places like Ebay than they have in physical stores. This would make sense given the recent reduction in Ethereum hashrate, which would indicate that some miners who are no longer profitable are disconnecting their GPUs and perhaps selling them on resale sites.
What Caused the Recent Decline in Ethereum Mining Profits?
A few key issues have caused ETH mining to stop making as much money as it did in 2021. The first and most obvious one is the cryptocurrency’s faltering price.
Since they often pay their energy bills and other operating expenses in fiat, miners depend on the USD worth of their mining profits. Ethereum’s value has fallen by 72% only one year, which indicates that miner profits would have suffered greatly.
The cost of power is another factor that is growing globally. The majority of the miners’ daily expenses typically include paying for electricity; hence, a rise in energy costs would reduce their net earnings.
The upcoming switch to a proof-of-stake consensus architecture would confuse network miners. This indicates that mining for Ethereum has a cutoff point, after which miners must generate a ROI to avoid losing money.
As they might not be able to generate any money until PoS arrives, miners in areas with high power prices may be left with no alternative but to sell off their GPUs in order to recover part of their investment.