Mining stalls - prices for video cards are declining

Graphics cards are predominantly used in Ethereum mining, which is from the November 2021 highscorrected by 60%. Due to the drop in mining profitability, the long-awaited price reduction for video accelerators is fixed.

Image Source: Cryptocurrency ExchangeStormGain

The last three years the main investment forceIn the crypto-currency market there are institutional investors – companies with investments from $1 million. This includes public mining companies with long-term investment goals.

The Cryptocurrency Boom of 2021 has spurred many of thethem to increase activity in the arms race. According to Digital Trends, last year miners accounted for 25% of all video cards sold, or 700,000 devices. This is reflected in the accelerating network hashrate growth, which has more than doubled in the past 10 months.

Image source: coinwarz.com

However, there is now a reassessment of the prospectsgrowth of the cryptocurrency market due to the actions of the Fed and a decrease in investment fervor among miners. For example, NVIDIA’s already unsuccessful line of CMP (truncated for mining video cards) from NVIDIA has collapsed in sales to “nominal levels”, and the company’s shares surprisingly repeat the movement of Ethereum, losing 51% from the November 2021 highs.

Refusal of miners from buying video cards favorablyaffected the retail price of the latter. So, the RTX 3080 model on European markets costs in the range of $1000 - $1300, while at the peak the price reached $1800; and the entire third-generation series is already close to the suggested retail price.

Image source: 3dcenter.org

Despite Ethereum's correction, difficultymining continues to grow, while profitability continues to decline. Now for 1MHash, miners receive an average of 2.4 cents per day, which is comparable to the level of mid-2020. The main earnings in the Ethereum network for miners are commission fees, but the decrease in activity has led to their reduction. The exception was spikes due to the launch of a new NFT collection and the collapse of Terra (LUNA).

Image Source:glassnode.com

Since the external economic background forcryptocurrency remains aggressive, it is assumed that mining profitability will remain at low levels, and the price of video cards will decrease by another 10-20% in the near future.

 

Analytical group StormGain

(platform for trading, exchanging and storing cryptocurrency)