news material The Incredible Expenditure Cryptocurrency Miners Buy Graphics Cards
15 billion dollars: this is the colossal sum spent in 18 months by cryptocurrency miners to acquire the graphics cards necessary for their small business, which has tended to take a lot of water lately.
The global pandemic has had dramatic consequences on many global markets. Among them, there is that of computer components, and more particularly that of semiconductors. A shortage that has had cascading consequences in the sectorand which led to major slowdowns in the production of graphics cards at Nvidia and AMD.
Results : GPUs have become rare on the market. But there was another problem: the few graphics cards available for sale have been bought in droves by cryptocurrency miners, who used bots to get their hands on huge stocks, often at full price. Bloomberg today reveals a colossal amount related to this specific market.
15 billion dollars spent in 18 months
Within a year and a half, Ethereum miners would therefore have spent the sum of 15 billion dollars to buy GPUs to power their cryptocurrency farms. A spectacular expense that does not take into account the purchase of the rest of the equipment, and which focuses on a single cryptocurrency: we are not talking about Bitcoin and other currencies. The fact is that Ethereum was, until recently, one of the most taken by miners around the world…until its price decided to crash.
In June 2021, JPR Institute estimates that 25% of graphics cards sold in the market during the first quarter of last year were intended to insert cryptocurrency mining farms, with a market value of half a billion dollars at the time. An observation that was already significant, but which only became more pronounced during the following months, with spectacular price spikes and a need to mine more and more to reap more profits.
Yesterday the excessive purchase, today the resale
There is, however, one point that crypto miners did not see coming: the spectacular collapse of the main virtual currencies in the market. In recent weeks, the price of Bitcoin has risen from $67,000 to $18,000, and that of Ethereum has fallen from $4,800 to $960.
From now on, many are those who, after having bought graphics cards at indecent prices for months, are now looking to resell them to limit their losses. But the fall in the price of cryptocurrencies has also led to a drop in the price of GPUs sold new. Indeed, fewer minors targeted, fewer sales, so prices revised downwards on the side of resellers who want above all to sell their stocks.
Graphics cards from mining farms do not have a good reputation, insofar as they can be quickly worn down by walking : buying a second-hand GPU that has been used for this therefore represents the risk of having a faulty component, and many people pass their turn at the slightest doubt. Why Risk Buying a Potentially Failing Graphics Card Usedwhen we can now find a reasonable price in a new version?
Aware that they will never recover their costs by reselling their GPUs purchased at full price, some miners have decided to switch to other cryptos, such as Ethereum Classic or Ravencoin, hoping for better days. Corn “The more miners that flock to a cryptocurrency, the harder it is to make a profit”, recalls Bloomberg. In the meantime, we have clearly never seen so many second-hand graphics cards available on the market, and unless cryptocurrency prices start to rise again very quickly, the trend is likely to increase further in the months to come. .