Ethereum’s successful upgrade to proof-of-stake consensus is receiving increasing backlash from the market. Therefore, upgrading Ethereum should only produce positive feedback, but where there are merits, demerits must exist.
One of the challenges the industry has faced since the Ethereum upgrade has been falling GPU prices. Graphics processing units (GPUs) in crypto mining have grown over the years as they have proven to be very efficient.
GPU companies were making huge profits due to the increased demand from ETH miners. However, this is no longer the case as the price of GPUs has dropped drastically over the past three months. Moreover, GPU prices have dropped further after the upgrade.
Is the Ethereum meltdown the main cause of the GPU price crash?
The South China Morning Post (SCMP) reported that GPU prices in China have fallen to a low due to the Ethereum merger. ETH mining has declined. The demand from miners for GPUs has therefore decreased. Miners’ demands for expensive cards such as GeForce RTX 3080 and RTX 3090 have become weak and have driven prices down to exceed factory prices.
Additionally, due to China’s mining ban and COVID lockdown, the demand for expensive GPUs has dropped and worsened during the bear market. Shanghai trader Peng told SCMP that the RTX 3080 has fallen over 37% in the past three months.
According to Peng, the price of the RTX 3080 has dropped from 8,000 yuan ($1,140) to less than 5,000 yuan (%712). Peng attributed the drop in GPU prices to the poor state of the crypto market.
Ethereum mining has been a major contributor to the high demand for GPUs over the past few years. Traders noticed a drop in GPU prices as the Ethereum merger approached.
SCMP reported that retailers in “Buy Now”, a major electronics market in Shanghai, are experiencing low demand for GPUs.
Retailers lower GPU prices
Chinese retailers slashed factory-suggested GPU prices by more than 33% in a matter of weeks to sell their gear. The reason for this is the crypto bear market and the GPU correction market.
According to data from Baidu, merchants lose the sale price against the factory cost of GPUs. Analysts have estimated that the average drop in GPU prices per week is around 10%.
Some reports show that NVIDIA, a major GPU manufacturer, is reducing the price of its GPU for card partners. This report is still unconfirmed, but it would likely lead to a further reduction in the coming weeks.
Although the drop in GPU prices may negatively affect many companies, others believe it marks the end of two nightmarish years. Many GPU retailers would previously raise prices as high as possible due to high demand from miners.
The GPU price crash could prove beneficial for AI coders, gamers, and other users, as Crypto miners have caused GPU prices to rise unnecessarily.
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