Top Crypto News Today: Gaming Chip Prices record a Huge Drop in demand ahead of Ethereum Merge

Synopsis

• Price of Graphic Processing Units are dwindling with the upcoming release of Ethereum 2.0 
• Bitcoin is flipping at $ 20k while Ethereum is recording an uptick as the Merge comes closer 
• Crypto tokens project unusual volatility: Is Merge the reason? 

Insight on GPU demand decline 

The Ethereum upgrade from proof of work to proof of stake consensus mechanism has been making headlines in the crypto world. With the Ethereum Merge ahead, the demand for Graphic Processing Units have significantly dropped, reported by CoinDesk reporter, Sam Reynolds

The rise and decline of GPU demand 

Crypto assets were introduced between 2009 -2014. When PoS crypto tokens went mainstream, the demand for GPUs catapulted to a whole new level. Since GPUs are essential for mining crypto the demand and supply equilibrium was tilted making GPUs expensive and often difficult to acquire too. With the Ethereum upgrade on cards, the demand for these GPUs have significantly declined. 

The bull run of GPUs 

During the ETH rally in 2021, the most powerful GPUs were selling over 114% of the Manufacturer Suggested Retail Price. With ETH’s growth in 2015, the graphic units were off the shelves in no time. The processing power of these units is essential to crypto mining making them a profitable investment.   

Miners’ dilemma on GPUs 

With Ethereum upgrading to a Proof of Stake protocol, users who bought GPUs in the last couple of years may find themselves in a perplexing situation as they are yet to figure out what purpose will these services have now. Some miners have been toying with the idea of moving to Ethereum Classic – the forked Ethereum blockchain. But, they are not fully convinced as to how Ethereum Classic will be any good. ETC has been there for a long time but does not solve any major purpose nor does it have a huge community behind it.    

GPUs decline graph with ETH Merge ahead 

John Peddie, an analyst from the industry published data on the GPU sale performance. According to the data, there is a 15% decline in GPU shipments since the first quarter. Another factor of the decline is the softening of the PC market, as observed by IDC. According to GPUTracker.eu the prices of popular GPUs have seen a double-digit sharp drop. Once a favorite amongst miners the RTX 3080 Ti, is selling at a 45% less price, close to MSRP. In February 2022, the GPU was selling at $ 2000 and is now selling at $ 1,100.  

China is facing a GPU inventory overload with miners both retail and institutional trying to discard these machines. Nvidia – a software firm manufacturing gaming graphic units saw a 33% decline in its gaming line. 

“Gaming is growing, workstation is growing, AI hyperscale data center is growing, high-performance computing is growing. Quite frankly, I’d prefer that our GPUs were built to be used in those areas,” Jensen Huang, CEO, Nvidia mentioned at the firm;s annual technology conference in 2018. 

What’s next for crypto miners, and the future of GPUs? 

With Bitcoin Price below $20,000 – an all-time low and the fact that 90% of BTC has been mined, there are less profitable options for crypto miners. However, crypto mining will revive with miners moving to other crypto assets that are available in abundance to mine. With ETH Merge and BTC failing to hold support the GPUs may have to take this hit in sales until mining communities draw a solution to keep the mining alive. 

Additional Read: Will ETH mining cease to exist? 

Source: CoinDesk