The Merge changed Ethereum’s protocol consensus from PoW to a more eco-friendly PoS. However, it caused some collateral damage along the way. For example, it is hurting GPU companies that were making a lot of profits thanks to the demand from ETH miners.
Asia-focused media outlet South China Morning Post(SCMP) reported that the Ethereum meltdown triggered a plunge in GPU prices in China, which caused sales to reach the “lowest level in history.”
Due to low demand from miners who used to buy expensive cards like Nvidia’s GeForce RTX 3080, RTX 3080 Ti, or RTX 3090, vendors have had to unexpectedly drop GPU prices three times the value suggested by the GPU factories.
The Most Expensive GPUs Have Dropped More Than 37% in Price.
Due to low demand from miners, high-end GPUs such as the RTX 3080 dropped over the past three months by more than 37%, from 8,000 yuan ($1,140) to less than 5,000 yuan ($712), Peng, a trader at a Shanghai market, told SCMP.
According to Peng, this whole situation could continue due to several negative scenarios surrounding the crypto market, such as the collapse of bitcoin, China’s mining ban, and even the new lockdowns due to COVID, which have only worsened the situation.
“When the wave of bitcoin mining was at its peak, people from the mining companies just walked in the stores with cash and took away all the graphics cards we had in store […] No one is buying new computers because of the coronavirus, not to mention those who want to install a new graphics card.”
Another trader surnamed Liu said that the Ethereum Merge was the trigger for the price collapse of GPUs, as since the last two months when the wait for the Merge began, even the cheapest low-end GPUs started to drop by more than 50% causing miners (who can no longer mine ETH) to sell their hardware at a considerable loss.
“I had a customer who bought an RTX 3080 card for 9,400 yuan late last year, and now he has to sell it for less than half that price, even though that specific model is not suitable for mining,”
Ethereum Merge Was The Trigger For Low GPU Costs
Cryptocurrency mining (especially ETH mining) fueled the Price of GPUs over the past few years; however, prices gradually plummeted as the Ethereum Merge approached.
According to SCMP, graphics card traders at Buy Now, one of Shanghai’s largest local electronics markets, are “standing idly by” as they watch the euphoria of miners after the Ethereum Merge pass them by.
In just a few weeks, Chinese retailers dropped the suggested retail price of GPUs by more than 33% in order to sell their equipment due to two reasons: The GPU market correction and the cryptocurrency crisis. In the chart below, the first column shows the name of the GPU, and the second to last shows the difference between the retail price and the price sold by the factory. All cards report a negative number, meaning GPU traders are trading at a loss right now.
Some researchers estimated that the prices of GPUs were dropping on average 10% every week before the merge. While this “crash” may result in the shutdown of many e-shops, for others, it is the end of a two-year nightmare where retailers raised GPU prices as much as possible due to the high demand they had from miners.