Ethereum miners have reportedly spent $ 15 billion on GPUs over the past two years, not including the costs of other components required for mining.


Ethereum miners have reportedly bought $ 15 billion worth of GPUs over the past eighteen months. Adding to that the prices of other components of their mining rig (CPU, power supplies, chassis), the amount spent on Ethereum mining hardware globally looks even more impressive. The miners may have consumed about 10% of the discrete supply of GPUs over the past eighteen months. This mining boom and subsequent accumulation of GPUs coincided with player demand, which helped fuel the sharp rise in prices.

While the tech sector has faced an unprecedented shortage of semiconductors for more than two years, Ethereum miners’ spending on GPUs continues to rise. The analyst firm Bitpro Consulting recently released an estimate of these expenses taking into account only the purchases of the last two years. On average, a GPU cost $ 1,056 per unit in 2021, compared to just a third of that price in 2019. Analysts reported earlier this year that GPU sales were around 51.8 billion. dollars for the whole of 2021.

According to the Bitpro Consulting report, it appears that Ethereum miners then took about 10% of the total GPU supply during the cryptocurrency bubble of the past two years. In fact, when the price of Ethereum rose sharply in October-November 2020, millions of people started mining Ethereum coins to make easy money. They used retail-bought graphics cards, and their purchases coincided with increased gamer demand as AMD and Nvidia released highly competitive Radeon RX 6000 and GeForce RTX 30 cards in late 2020.

Demand from players and miners has outstripped supply, causing prices to skyrocket. For this reason, the average selling prices of GPUs, already high at the end of 2020 due to the boom in PC games during the Covid-19 pandemic, have reached unprecedented levels. According to a GPU pricing trend report, in the first quarter of 2021, a high-end graphics card with a manufacturer’s recommended retail price (MSRP) of $ 649 or more had an average price of $ 1,358, while the lower average selling price The GPU cost $ 1,062.

Based on the approximate average price of a graphics card in 2021 and the amount that miners spent on GPUs, Bitpro Consulting estimates that Ethereum miners consumed around 14.2 GPUs from Q4 2020 to the end of Q1 2022. The analysis the company adds, however, that this amount is not entirely accurate, as some miners used special cards (not counted by the report) for Ethereum mining, while others used gaming laptops for mining. The actual number of GPUs used by mining farms may therefore be different.

However, the report says the $ 14.2 million figure is significant given that Ethereum mining has flourished for six quarters. In fact, from the fourth quarter of 2020 to the first quarter of 2022, approximately 73.55 million desktop discrete GPUs would be shipped. Bearing in mind that the standalone GPU market today is roughly split between desktops and laptops, it appears that Ethereum consumed around 10% of total GPU production between Q4 2020 and the end of Q1 2022.

However, Bitpro Consulting says it’s even more difficult to quantify the number of GPUs used for both gaming and mining. Ethereum’s value has dropped 70% this year, and analysts say it’s unlikely anyone will buy a bunch of new graphics cards to mine Ethereum. People who bought their graphics and platforms early enough would probably have made big profits when Ethereum was at its peak. But those who started mining last year could wait months or even years to recoup their investments.

Furthermore, analysts indicate that the drop in the price of bitcoin should also support the drop in GPU prices. Recent reports have revealed that the prices of new and used graphics cards continue to fall, following price spikes between late 2021 and early 2022. Now it would be possible to buy the latest generation GPUs at prices that would have seemed like bargains to be had. six months or a year ago. The mid-range Nvidia GeForce RTX 3000 GPUs would continue to sell at or slightly above MSRP. Second-hand GPU prices are also said to be steadily declining.

Between June 1 and June 15, eBay’s prices for used GPUs would drop by an average of 10% as some cryptocurrency miners tried to cut losses by selling their hardware. This is also said to happen when mining software begins to find ways to bypass Nvidia’s hash rate limiting LHR protections. Finally, second-hand GPUs could become even cheaper as bitcoin and Ethereum mining becomes less profitable.

Due to a significant drop in the price of bitcoin in recent months, mining has become less profitable. For some bitcoin miners, it might not even be profitable right now, “said cryptocurrency analytics platform CryptoRank in a recent report. On the Ethereum side, the profitability of mining has declined due to the shift from the proof-of algorithm. -work on the proof-of-stake algorithm.

Moving from proof-of-work to proof-of-stake will significantly reduce energy consumption and let some expensive technologies find new uses. This should increase the number of used GPUs available on the market.

And she ?

What is your opinion on the subject?

What do you think of Ethereum miners’ GPU spending over the past couple of years?

What do you think of the gradual decline in GPU prices?

What other factors do you think could bring GPU prices down?

See also

Bitcoin dips below $ 20,000 for the first time since 2020 after hitting a high of $ 69,000 in November – a boon for GPU sales as prices continue to fall

Cryptocurrency fraud is growing exponentially, the FTC report says

Bitcoin mining is becoming unprofitable as the price of bitcoin has dropped to the level of the average cost of mining, which could cause major changes in the market.

Bill Gates says cryptocurrencies and NFTs are “100% based on the biggest madman theory” fraud, adding that these assets are energy-hungry and harmful to the environment.


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