According to Bloomberg, cryptocurrency miners have spent astronomical amounts to equip themselves with computer equipment. Activity exploded in 2020, which also coincides with the onset of component shortages at the start of the Covid-19 pandemic. However, the craze has died down and prices are gradually returning to normal.
End of the graphics card shortage?
The global pandemic has had a huge impact on many global markets. Among them are computer components, including semiconductor components. The shortages had a ripple effect on the industry and caused a major slowdown in graphics card production at Nvidia and AMD.
Result: GPUs are becoming rare on the market. But there is another problem: the few graphics cards for sale are bought up en masse by cryptocurrency miners, who use bots to obtain large supplies, often at high prices. Bloomberg today revealed the huge sums of money associated with this particular market.
So in a year and a half, ethereum miners would have spent $15 billion buying GPUs to outfit their cryptocurrency farms. A spectacular release that does not take into account the purchase of the rest of the equipment, and that 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 crash.
In June 2021, the Jon Peddie Institute estimated that about 25% of graphics cards are purchased for crypto mining purposes. Bloomberg’s $15 billion advance appears to be headed in that direction.
Hard numbers are hard to come by, but estimates put the market for so-called “desktop” graphics cards at nearly $52 billion for all of 2021.
So even if they focus on a longer period (18 months), the said $15 billion for ETH mining alone represents a significant portion. From now on, it should change with the hefty price drops.
Miners try to resell their hardware
However, there is one thing cryptominers could not have foreseen: the dizzying collapse of the major virtual currencies on 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 now want to resell their hardware to cut their losses after buying graphics cards for months at unreasonable prices. But the drop in cryptocurrency prices has also led to a drop in the price of newly sold GPUs.
In fact, there are fewer interested miners, fewer sales and therefore lower prices for dealers who prefer to sell their inventory.
As a bonus, graphics cards from mining companies don’t have a good reputation, because they wear out quickly in the process: so buying used GPUs for this purpose carries the risk of components failing, and many people will pass by with the slightest suspicion.
Realizing that they would never be able to recoup the cost by reselling the GPUs they had 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 move into cryptocurrencies, the harder it becomes to make a profit,” Bloomberg recalls. At the same time, we have clearly never seen so many used graphics cards on the market, and unless cryptocurrency prices start rising again quickly, this trend is likely to increase further in the coming months.
This explains why Nvidia has been reluctant to provide details on its sales figures, or why AMD has officially insisted it never sells GPUs to miners. Fortunately, much has improved since then. The cryptocurrency crash has had a huge impact on graphics card sales, which are now falling relentlessly.