GPU price cut could be an indication of low interest in cryptocurrency mining following crypto crash

Several restrictions on cryptocurrency mining and the steady loss in their value may have caused a loss of interest among the cryptocurrency mining community. A drop in sales volume of Nvidia and AMD GPUs is now being reported as an indicator of the same.

Prices of Nvidia and AMD GPU units are dropping in several regions around the world. Reports indicate that prices have seen a dip of over 11 per cent, with an average cut of 5 per cent across models. While it may not seem to be a great deal, this is the first in a long time that GPU prices have gone down. This also proves to be an important indicator - a possibly waning interest in cryptocurrency mining following the crypto crash.

GPUs or graphics cards could be easily adapted for mining cryptocurrencies like Ethereum. GPUs have thus been in increased demand, with the added pressure on supply coming from the mining community to an extent that GPU makers like Nvidia had to take measures to restrict some models for their gamer communities. The pandemic did not make things easy by disrupting the supply chain for many components.

GPU prices had thus been up for a long time. The recent crypto crash has changed that. Tom's Hardware mapped the prices of Nvidia and AMD GPUs on eBay over the past week in the US. Comparing the data to a week of December, the publication notes that the prices have come down by about 12 per cent. On average, most graphic cards have seen a dip of about 5 per cent in prices.

For instance, Nvidia's much loved RTX 3090 and RTX 3080 both saw a drop of 10 per cent in their prices. AMD's Radeon RX 6600 also dropped by 11.6 per cent during the period. Interestingly, it isn't just the GPU prices that have seen a decline. The sales volume for almost all GPUs has also been dropping steadily.

A report by 3DCenter.org, as spotted by The Verge, also mentions a similar price drop in Germany. This one is a bit more intriguing as it does not map prices of second-hand GPUs on eBay but those of local retailers. The price drop is hence, quite real the world over.

The report credits the GPU price drop to two major reasons. One, an increased production of Ajinomoto Build-up Film (ABF) substrate, a layer that connects the components of a CPU by providing electrical insulation, and was in shortage for the past couple of years. The other, and one that all of us are more familiar with, is the long and steady crypto crash.

The price drop indicated above was noted in the week before the recent crypto crash. Thus, it better relates to the steady decline in the market value of cryptocurrencies over the past few months. Triggered by the recent dump, Bitcoin has now lost almost 50 per cent of its peak value in November last year. The cryptocurrency market on the whole has lost over $1 trillion in market value since then.