GPU Prices Decline 57% Since Jan As Ethereum Mining Profits Go Down

GPU Prices Decline 57% Since Jan As Ethereum Mining Profits Go Down

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

GPU prices fall as demand from Ethereum miners loses

In 2020, due to a series of factors such as pandemic and chip supply shortage, the next generation of graphics cards was launched with a The quantity was quite low  and the price then skyrocketed. 

Then, as the crypto bull run took hold in 2021, Ethereum mining became quite 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 or even triple 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 fell about 14%.

Graphics Card Price Change 2022
Graphics Cards Price Comparison by Tom's Hardware

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. 

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 cryptocurrency's difficult price. 

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 alone, Ethereum has lost 72% of its value, which means that the income of miners will be significantly affected. 

ETHUSD Chart on Trading View
Source: TradingView

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.