With the upcoming merge, the world’s second-largest cryptocurrency by market capitalization is bound to retire its proof-of-work consensus mechanism in order to adopt a cleaner and more environmentally-friendly “staking” consensus.
When this happens, Ethereum will let go of around 260 thousand miners that, up to today, were responsible for the creation of new tokens and the renovation of the blockchain.
With the diminishing of Ethereum’s mining community, Graphic Processing Units (a.k.a GPUs), which are the hardware components responsible for processing video and graphics into a computer, are bound to decrease.
How Cryptocurrency Affects GPU Prices
Cryptocurrency mining is largely responsible for the inflation of GPU prices worldwide. In fact, the mining community is only behind high-performance PC gamers when it comes to GPU purchases.
It’s not uncommon to see hardcore miners investing hundreds of thousands of dollars into GPU rigs in order to mine cryptocurrencies. On top of that, there are hundreds of “mining farms” out there that contain hundreds to thousands of GPU units each – all in order to mine the maximum amount of currency as quickly as possible.
Mining represents a good chunk of the driving prices of graphics cards. In 2021, miners were responsible for a quarter of all GPU purchases in the world.
For that reason, Cryptocurrency mining represents one of the largest driving forces around GPU prices going up or down.
When the cryptocurrency prices began to slow down in May of this year, GPU prices dropped by around 15%, in the following months as cryptocurrencies continued their bearish trend, GPU prices continued to drop.
This year, the cost of Nvidia GPUs has severely decreased.
The anxiety about how significant these drops may end up being in the future only increases as the business braces for another price drop for its RTX 30-series GPUs.
The previous week has seen a rapid decline in GPU pricing.
While certain aspects of cryptocurrency mining are still profitable, the value of the recession in Bitcoin increased by 30%, meanwhile, Ethereum fell by over 40%.
According to Colette Kress, chief financial officer and executive vice president of Nvidia, the decrease in GPU’s market value was “sharper than anticipated for Nvidia”.
Future For Ethereum’s Mining Community
Nearly tens of millions of GPUs bought in the last four years to mine Ether were considerably impacted by the Ethereum merge.
According to recent reports, the Ethereum mining community is already planning on jumping ship to other PoW currencies that allow mining tokens.