According to Bloomberg, cryptocurrency miners have spent astronomical sums on equipping themselves with computer equipment. Activity exploded in 2020, which also corresponds to the beginning of the lack of components at the beginning of the Covid-19 pandemic. However, the craze has subsided and prices are gradually returning to normal.
No more graphics cards?
The global pandemic has had a huge impact on many global markets. Among them are computer components, including semiconductor components. The shortage had a contagious effect on the industry and caused a major slowdown in graphics card production at Nvidia and AMD.
Result: GPUs are becoming rare in the market. But there’s another problem beyond that: the few graphics cards for sale are being bought up by masses of cryptocurrency miners who use bots to obtain large stocks, often at high prices. Bloomberg today unveiled the huge sums of money associated with this particular market.
Thus, in a year and a half, ethereum miners would have spent $ 15 billion on buying GPUs to equip their cryptocurrency farms. A spectacular expense that does not take into account the purchase of the rest of the equipment, and which focuses on a single cryptocurrency: we are not talking about Bitcoin and other currencies. The truth is that until recently, Ethereum was one of the most popular blockchains for miners until the price decided to go down.
In June 2021, the Jon Peddie Institute estimated that approximately 25% of graphics cards are purchased for cryptocurrency purposes. Bloomberg’s $ 15 billion advance seems to be heading in that direction.
Difficult numbers are hard to find, but estimates put the so-called “desktop” graphics card market at nearly $ 52 billion for the whole of 2021.
Although they focus on a longer period (18 months), the said $ 15 billion for ETH mining alone therefore represents a significant part. From now on, things should change with the marked fall in prices.
Miners try to resell their hardware
However, there is one thing that crypto-workers did not foresee: the dizzying collapse of the major virtual currencies in the market. In recent weeks, the price of Bitcoin has risen from $ 67,000 to $ 18,000, and the price of Ethereum has risen from $ 4,800 to $ 960.
Many people are now looking to resell their hardware to reduce their losses after months of buying graphics cards at unreasonable prices. But the fall in cryptocurrency prices has also led to a fall in the price of newly sold GPUs.
In fact, there are fewer interested miners, fewer sales and therefore lower prices for traders who are most eager to sell their shares.
As a bonus, mining graphics cards do not have a good reputation as they are quickly worn out in the process: so buying used GPUs for this purpose involves the risk of component failure and many people will pass with the slightest suspicion.
When some miners realized that they could never get the cost back by reselling the GPUs they bought at full price, some miners decided to turn to other cryptocurrencies, such as Ethereum Classic or Ravencoin, in hopes of better days.
But “the more miners flock to cryptocurrencies, the harder it becomes to make money,” Bloomberg recalls. At the same time, we have clearly never seen so many used graphics cards on the market, and unless cryptocurrency prices start to rise rapidly again, this trend is likely to increase further in the coming months.
This therefore explains why Nvidia has been reluctant to detail its sales figures, or why AMD officially maintains that they never sell GPUs to miners. Fortunately, things have gotten a lot better since then. The cryptocurrency crash has had a huge impact on graphics card sales, which are now falling relentlessly.