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GPU Prices Plunge as Demand from Crypto Miners Subsides

It’s summer 2022 and GPU prices are once again reasonable. For example, Nvidia RTX 3090 Ti – one of the most sought GPUs on the current market – is now available for under $1,500, which is $500 cheaper than just a month ago.

So, what’s happened over the last 30 days? One reason behind the GPU price drop is that the manufacturer has solved the problem regarding production shortages. The other reason is that the demand for powerful GPUs has subsided globally due to crypto miners losing their interest.

With the value of Bitcoin and other digital currencies dropping down over the last couple of months, cryptocurrency mining is no longer as profitable as before. Spending a few grand on GPUs that are powerful enough to mine cryptos is no longer seen as a profitable investment. But will it be profitable once again after the 2022 Bitcoin winter is over?

How Does Bitcoin Winter Affect GPU Prices?

Bitcoin and Ethereum reached their all-time high prices back in November 2021, but have since shred about 70% of their values. Right now, Bitcoin is trading at ~$24,500, while the price of one Ether is $1,732.

Before hitting the rough patch, these two cryptocurrencies were all the rage not just among crypto investors but crypto miners as well. Both are based on the proof-of-work (POW) – even though Ethereum is supposed to switch to the proof-of-stake (POS) model – which makes them ideal for mining with the use of GPUs.

Back in November, Bitcoin/Ethereum mining using GPUs was a profitable business. However, during the crypto winter, it may no longer be the case. Of course, the profitability of crypto mining depends on a number of other factories, including the price of electricity. Still, one thing is certain – crypto mining is going to get more profitable once the crypto winter ends.

Even if Ethereum switches to the POS model, GPU miners will still have plenty of other options at their disposal. In fact, a majority of leading cryptos are based on the POW model, which makes them suitable for GPU mining. Among those is Bitcoin, as well as digital currencies like Dogecoin, Litecoin, and Monero.

Is Cryptocurrency Mining Still Profitable?

Even though the crypto winter has hit the world in the middle of the summer of 2022, cryptocurrency mining still remains a relatively profitable industry. We say “relatively” because it all depends on who’s doing it.

The thing is that most BTCs are mined by large professional mining companies. In fact, 10% of bitcoin miners are responsible for 90% of the mining activity in the world. Those companies aren’t affected by the crypto winter, at least not as much that they would decide to quit mining. When it comes to amateur miners who use GPUs for this process, their work is heavily affected by the prices of digital currencies.

What this means is that in 2022, a micro-miner cannot expect huge profits. In fact, they can only hope that their investment is going to pay off in the future when (or if) cryptos recover.

Should You Start Crypto Mining in 2022?

No one can say for certain whether the price of Bitcoin (and other digital currencies) will bounce back. Those who think it will, cannot say for sure when is it going to happen – by the end of the summer, by the end of the year, or maybe in 2023?

With such uncertainty, starting a crypto-mining business is a risk not many are willing to take. So, what’s our advice? We say go for it, especially if you’re thinking about using GPUs for this purpose. The reason is that unlike mining machines like the widely-used Antminer, GPUs can be used for other things.

So, even if your mining business goes sideways, you can use the GPUs for your computer. The aforementioned Nvidia RTX 3090 Ti is so powerful that it can be used to run literally all the video games available in 2022, as well as enabling you to watch 8k videos on your PC.

Lee Jenkins

Lee is our resident cryptocurrency expert who knows the ins and outs of each coin and the blockchain technology behind them. You’ll find that most of our technical guides are written or overseen by Lee and they are all easily digestible by the new and experienced alike, so there is no better place to learn blockchain 101 than here. Occasionally you may see a news article from him if it’s tech related!