miners spent $ 15 billion on graphics cards in 18 months

According to Bloomberg, cryptocurrency miners have spent astronomical sums to equip themselves with computer equipment. Activity exploded in 2020, which also corresponds to the onset of component shortages at the start of the Covid-19 pandemic. However, the craze has subsided and prices are gradually returning to normal.

End of the shortage of graphics cards?

The global pandemic has had a huge impact on many global markets. Among them are computer components, especially semiconductor components. The shortage had a ripple effect on the industry and caused a sharp slowdown in the production of graphics cards at Nvidia and AMD.

Result: GPUs are becoming rare on the market. But there is another problem beyond this: the few graphics cards available for sale are bought in bulk by cryptocurrency miners, who use bots to obtain large stocks, often at high prices. Bloomberg today unveiled the huge sums of money linked to this particular market.

So, in a year and a half, ethereum miners would have spent $ 15 billion to purchase GPUs to equip 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 truth is that until recently, Ethereum was one of the most popular blockchains for miners until its price plummeted.

In June 2021, the Jon Peddie Institute estimated that around 25% of graphics cards are purchased for cryptocurrency mining purposes. Bloomberg’s $ 15 billion advance appears to be heading in that direction.

Hard numbers are hard to come by, but estimates put the market for so-called “desktop” graphics cards at nearly $ 52 billion for the whole of 2021.

Even if they aim for a longer period (18 months), the 15 billion dollars quoted for ETH mining alone therefore represent a significant part. From now on, things should change with the sharp drop in prices.

The miners try to resell their hardware

However, there is one thing that cryptocurrency miners hadn’t anticipated: the staggering collapse of the major virtual currencies on the market. Over the past few weeks, Bitcoin’s price has gone from $ 67,000 to $ 18,000, and Ethereum’s price has gone from $ 4,800 to $ 960.

Many people are now looking to resell their hardware to reduce losses after months of buying graphics cards at unreasonable prices. But the drop in cryptocurrency prices has also led to a drop in the price of newly sold GPUs.

In fact, there are fewer interested miners, fewer sales, and therefore lower prices for resellers who are more eager to sell their shares.

As a bonus, mining farm graphics cards don’t have a good reputation, as they wear out quickly in the process – so buying GPUs used for this purpose carries the risk of component failure and many people will pass with the slightest suspicion.

Realizing that they could never recoup the cost by reselling the GPUs purchased at full price, some miners have decided to turn to other cryptocurrencies, such as Ethereum Classic or Ravencoin, in hopes of better days.

But “the more miners pour into cryptocurrencies, the harder it becomes to make a profit,” Bloomberg recalls. At the same time, we have clearly never seen so many used graphics cards on the market, and unless cryptocurrency prices start rising rapidly again, this trend is likely to increase further in the coming months.

This then explains why Nvidia has been reluctant to detail its sales figures, or why AMD officially claims it never sells GPUs to miners. Fortunately, things have improved a lot since then. The cryptocurrency crash had a huge impact on graphics card sales, which are now relentlessly declining.

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