The crypto market has lost almost 50% of its total market capitalization in 2022. The sector experienced a two-year bull run which has come to a halt leading to unexpected implications across other industries.
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According to a report from mainstream media website Motherboard, the crypto market crash has impacted the price of Graphics Processing Units (GPUs). These items have been trending in tandem with this sector and have become cheaper.
As the report claims, GPUs rose to high prices during the COVID-19 pandemic. At that time, the increase in these items’ prices was attributed to a surge in demand, more people stayed at home as a result of the lockdown measures imposed by most of the western world.
At the same time, the price of Ethereum and other mineable cryptocurrencies rose to new all-time highs incentivizing people around the world to purchase GPUs and launch mining operations. This took a toll on the global supply of GPUs.
These items were impossible to get until very recently, and opposite to the current inflationary outlook, have been dropping in prices. Miners seem to be liquidating their GPU stocks as the economic incentives to mine ETH and other cryptocurrencies are gone.
As seen below, top-of-the-line GPUs from the 3080 and 3080ti series, high capacity and performance hardware, have entered the Chinese market. Crypto miners in the region have been selling this equipment at their manufacturer’s suggested retail price.
Chinese Miners are dumping 3080 at a pretty crazy price on Xianyu (Taobao 2nd market smartphone app), from just 3500 yuan ($523).@CapFrameX @davideneco25320 @kopite7kimi @chunvn8888 pic.twitter.com/KMCPyXJDzI
— I_Leak_VN (@I_Leak_VN) June 21, 2022
In some cases, as Motherboard confirmed, these pieces of equipment are being auctioned at much lower prices. An Nvidia RTX 3080 GPU, the report claims, can be purchased at around $699 or less, a very large discount as opposed to 2021 when the same hardware was hard to get and could have been priced north of $1,000.
How Ethereum Could Be Affecting Crypto Miners
In addition to the decline in prices for the majority of cryptocurrencies, Motherboard claims the Ethereum transition to a Proof-of-Stake (PoS) consensus could be taking a toll on crypto mining activities. This asset will stop relying on miners to validate its transactions once the migration process is completed.
This process still lacks a specific deployment date on mainnet. However, the ETH network has been affected and could continue to be affected by miners’ unprofitability, and an uncertain future, as shown by a recent decline in its hashrate. As Wu Blockchain reported:
After the hashrate of Ethereum surpassed the all-time high of 1000TH/s in early June, it has dropped by about 12% in the past 20 days. Ethereum miners earn about $15 million a day now, down 50 percent from a month ago.
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At the time of writing, ETH’s price trades at $1,080 with a 6% loss in the last 24 hours.