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GPUs getting cheaper as Ethereum switch to PoS gets closer

Graphics processing units GPUs, which are required to mine Ethereum, are becoming increasingly affordable as the network prepares to transition from a Proof-of-Work (PoW) model to a Proof-of-Stake (PoS) one, which will render these computer parts largely useless for Ethereum. 

Using data from Tom’s Hardware, the asking price for popular GPU models on eBay had decreased by 37% since May 2021, when Chinese officials declared a further crackdown on crypto mining in the nation.

However, since Ethereum developers have been testing the PoS model, the price has dropped significantly this year, and the price of the second-largest cryptocurrency has plummeted.

In the first three months of the year, the prices of ten leading GPU models on the online marketplace fell by 7.4 percent, 9.5 percent, and 12 percent, respectively – the most straight drops since May 2021.
Mining accounts for approximately 35% of global consumer demand for GPUs, according to Tristan Gerra, Managing Director and Senior Analyst for Semiconductors at investment bank Robert W. Baird.

GPU miners “are not really investing in new equipment at the moment, because prices have been high for a long time,” and “most of them are likely waiting for when Ethereum moves to PoS, to buy up the second-hand GPUs” from those who will give up when the switch occurs, according to Joe Dowie, chief marketing officer at hashpower broker Nicehash.

“It’s widely accepted right now as a poor investment since the ROI is significantly longer,” Dowie added.
Daily hashrate rise in percentage on the Ethereum network, averaged over a year.

According to data from the information portal Etherscan, the network’s hashrate, which is a measure of computing power, has been pretty consistent since the beginning of the year. When Ethereum switches to PoS, even more GPUs will be dumped on the secondary market, causing prices to skyrocket, according to Gerra.

The fact that the price of ethereum has been relatively low while the difficulty of mining has increased adds to the downward pressure. According to the information site MiningPoolStats, the price has lately increased slightly, but “there is still some distance to the previous top,” according to a spokesperson for f2pool, the second-largest Ethereum mining pool by computing power.

At the same time, the difficulty of mining ethereum continues to climb, therefore GPU miners’ mining profitability is steadily dropping, according to an f2pool spokesman.

NiceHash saw over 300,000 miners leave their platform as the Ethereum network hit record difficulty in December, according to Dowie. According to Haohao, a sales rep from Xuxin Science and Technology, a company that resells mining machines in China, the war in Ukraine reduced crypto prices in February, making mine less viable, and so GPU prices fell even further.


According to Haohao, approximately 20% to 30% of crypto mining equipment in China has been sold since the crackdown.
Since the ban, the domestic market has been “flooded with a lot of second-hand equipment, and although the majority of this is ASICs, there was also some huge GPU mining there, which helps pulls costs down,” according to Dowie.

Slowing consumer demand in China and Europe has resulted in even more excess inventory in the last month or so, sending GPU prices even lower, according to Gerra. As a result, the investment bank cut Nvidia’s stock from outperforming neutral earlier this month.

Nonhlanhla P Dube

Nonhlanhla P Dube is a senior news reporter at Rateweb. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her directly by email at [email protected]

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