Does Bitcoin’s sadness make players happy?

The prices of graphics processing units (GPUs), also known as graphics cards, are undoubtedly still far from the manufacturer’s suggested retail price (MSRP). However, they are not what they used to be, especially given how GPU prices looked a year ago.

For example, according to reports from 3D Center, the price of a GPU from the Nvidia GeForce RTX 30 series is 14% based on its MSRP. Whereas AMD’s Radeon RX 6000 is up 7% from its MSRP compared to April 17 and May 8. On the other hand, for the first time since January, AMD’s Radeon RX 6000 fell below 10% based on MSRP.

Meanwhile, just a month ago, the same prices were 19% and 12% above their MSRP, respectively.

The Nvidia RTX 3080 currently has a price range of $1,000 to $1,300. Despite being this far from its MSRP of $699, the price is still almost 30% down from its $1,800 peak.

Regardless, the question on everyone’s mind is whether the falling GPU prices are somehow related to the current cryptocurrency market situation.

Currently, there is hardly any digital asset, large or small, that has not been affected by the crypto market tsunami. As crypto continues to crash, GPUs are getting more and more affordable. So one might wonder what’s responsible for the continued drop in GPU prices lately.

Hisham Khan, founder and CEO of Aldrin, believes that the bull market in the crypto space has benefited GPU manufacturers like Nvidia a lot. If the current market slump and sell-off continues along with a prolonged period of low activity in the crypto space, this will “definitely affect GPU manufacturers”. He told Cointelegraph:

“If you are mining Bitcoin and other cryptos with an Nvidia graphics card, the time you have to spend mining after committing capital to purchase these GPUs will depend on the price of the crypto assets. If the price drops, you will have to mine longer to break even, which may deter people from jumping into mining.”

Factors causing GPU price increases

GPU prices can go crazy for a number of reasons, some of which include high demand for new products, global chip shortages, supply chain issues, and increased demand from the crypto boom.

First, as with almost any product, there is the promise of better features or performance over the previous product, resulting in increased demand for the product and an inevitable price increase.

For example, some kind of exorbitant pricing can be expected as Nvidia and AMD prepare to launch their next-gen graphics cards. This should also somehow lower the prices of the cards that are on the shelves.

According to a report by Digital Trends, some believe that when both Nvidia and AMD launch their new products, other GPUs currently available will undoubtedly drop in price or even drop below their MSRP.

Second, when there’s a shortage of chips, producing graphics cards becomes even more cumbersome, and then there’s a struggle to get hold of the few GPUs in circulation. As expected, demand rises and prices inevitably rise.

Finally, there is a strong link between graphics cards and the cryptocurrency market, as GPUs can be used to solve cryptographically-intensive proof-of-work (PoW) blockchains such as Bitcoin.

According to the Digital Trends 2021 report, around 25% of all graphics cards sold in the first quarter of the year went to crypto miners. That means around 700,000 GPUs; As has been seen many times in the past, when crypto is booming, GPU prices mostly rise and vice versa.

Final: Implementation and adoption: What do the UK’s recent regulatory goals for crypto mean?

Bitcoin’s sadness, players’ luck

Khan believes that “Branding and what NFTs and the crypto community have done so far” for the playing field, whether players are interested in fiat tokens (NFTs) or crypto, is not well received. he said:

“If you look at top streamers playing games where NFTs and crypto are extremely bad, it’s written that the whole thing is just a scam. So, good players in the space are needed to create a fun and sustainable game that will leverage crypto and tokenization technology, not the other way around.”

The current drop in GPU prices can be attributed to the current cryptocurrency market situation. Crypto prices have taken a dive, and likewise, graphics card prices are falling as some small miners reliant on ad-hoc operations with GPUs exit the market.

However, some believe that graphics card prices have been falling steadily for some time. In fact, a report by the Tech Times in February 2022 suggests a general price cut in the GPU scene.

It should be noted that the crypto market crash didn’t exactly happen overnight either, as the market has been in a general downturn since the start of the year.

While volatility and the crypto market go hand in hand, the past week has been one of the craziest ever in the crypto space. Since hitting all-time highs in November 2021, the two leading cryptocurrencies Bitcoin (BTC) and Ether (ETH) have been in a downward spiral. And once the aforementioned top two hits, a bear market or so-called crypto winter has arrived for the entire ecosystem.

But according to a Reuters report, the recent crash saw the cryptocurrency market lose nearly $800 billion in value within a month. And while GPU prices and gamers live for that to happen, miners aren’t.

Finale: El Salvador’s Bitcoin game: What does the current slump mean for adoption?

According to Investopedia, miners are usually rewarded with 6.25 BTC for completing a block. This means that around last November, when the price of Bitcoin was around $55,000, the reward for completing a hash would be around $344,000. Today, however, BTC is trading at around $30,000, and the reward figure for completing a hashing is expected to be around $188,000.

Meanwhile, rising electricity costs and higher mining difficulty are reducing profit margins for cryptocurrency miners, which may be pushing some to exit the market.

In addition to current market conditions, there is also the issue of Ethereum’s transition to a proof-of-stake (PoS) model. This consensus mechanism would not rely on miners to solve cryptographic puzzles to verify transactions, but would rely on staked tokens to maintain the health of the network, completely defeating the purpose of mining, thus opening up a huge supply of GPUs to regular gamers.

Recent research by popular analyst and graphics industry pioneer Jon Peddie, who is also the head of Jon Peddie Research (JPR), claimed that cryptocurrency miners often make large, bulk GPU purchases for their operations. Hence, the graphics card market will be heavily impacted as crypto prices are on a downward trend.

In the meantime, it is quite important to understand that crypto may eventually recover, and when the market recovers, there is a possibility that GPU prices will rise again, especially given the ties between GPU prices and the crypto market that has been established so far.