Prices of graphics processing units (GPUs) have drastically dropped, under pressure from declining cryptocurrency prices which have led to lower demand from cryptocurrency miners.
Bitcoin has dropped from a peak of USD 20,000 in December 2017 to around USD 6,000 in June and July, a 70% decline. Almost all other cryptocurrencies have had similar or worse price declines. When market conditions are right, miners buy as many GPUs as possible and strap them together to create a mining farm. However, GPU mining is only profitable if cryptocurrency prices are high enough, and now prices for cryptocurrency have dropped so much that GPU mining has become unprofitable for many cryptocurrencies.
In April 2018, the top end AMD OEM 4 GB RX 580 GPU was selling in six packs for USD 3,600 and sold out, now there is plenty of inventory and it is selling for USD 2,500. The NVIDIA GeForce GTX 1080 GPU declined from USD 1,050 to USD 709 during the same time period. This is directly caused by decreasing demand from cryptocurrency miners; shipments of GPUs to crypto mining have decreased 55.5% since late 2017.
It is estimated that there are several million GPU units in inventory worldwide, including 1 million being held by NVIDIA. This massive surplus is the result of GPU manufacturers ramping up production to keep up with demand during the cryptocurrency rally, followed by demand unexpectedly dropping drastically, leaving them holding the bag.
Now, manufacturers are forced to lower prices until they sell off their surplus inventory and this is actually delaying them from launching new and improved GPUs, giving smaller competitors a chance to get the upper hand by releasing faster GPUs.
Another compounding factor is that cryptocurrency mining with GPUs has become so unprofitable that miners are trying to salvage some money by reselling GPUs at a fraction of the retail cost, releasing large amounts of miners onto the market. Ethereum miners also face a fresh threat in the form of the Antminer E3 from Bitmain, which is more cost-effective than GPUs for mining Ether.
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