The GPU versus the crypto market scale seems to be tipping sharply with the significant rise of the GPU prices and heart-breaking losses for crypto investors. Most cryptocurrencies dropped tremendously, with some once thought the most reliable coins, such as Stablecoins, taking the hardest blow. The start of 2022 has particularly been terrible for cryptocurrencies, majorly due to the rapid rise of interest rates, inflation, and, to add insult to the injury, the Ukraine-Russia war.
Why Are GPU Prices Dropping?
We have probably blamed the pandemic for literally everything, but the consequences of failing economies are still with us. The effects of cryptocurrency mining were bound to catch up with the GPU market. Despite the considerable supply reduction for the same resource, it induced a high demand for the processors. The lack of balance between supply and demand ignited a huge storm in the market with a remarkable increase in GPU prices. A report by JPR indicated that approximately a quarter of all GPUs produced were out of stock by mid-year 2021.
However, 2022 turned the tables with a considerable number of cryptocurrencies plummeting drastically, causing a crash in the market. In the previous weeks alone, stablecoin took a dip creating another meltdown and bringing bitcoin down. A whopping $300 billion worth of market value went down the drain, contributing to the massive downfall of several long-term investors. Consequently, GPUs have also been affected, with brands like AMD noticing a huge drop in April and May. The average drop for some GPUs ranges between 8% to 15%.
Will GPU Prices Drop Further?
The GPU market is slowly dropping below the MSRP( Manufacturer's Suggested Retail Price). It is also worth acknowledging that after two long years of shortage and inflation, people no longer sell the GPUs at double their actual market values. However, It is not time to celebrate yet as some sites like eBay are still selling the RTX 3070 AND 3060 Ti at 1.5 times their MSRP value. Companies like Nvidia and AMD have been hinting at the release of next-gen GPUs, thus increasing the supply of graphic cards. This will certainly impact the pricing of those available on the shelves. As we wait for that to happen, all eyes are on the market, especially with the ongoing earthquakes in the crypto market.
A further sink in the crypto ship is likely to generate a drop across the board.
Will the Crypto Market Regain Stability?
Typically, the high volatility nature of the Crypto market makes it difficult to make accurate projections. Whereas cryptocurrencies seem to be in trouble now, they are bound to gain momentum and slowly reclaim their glory days. Unfortunately for those that had invested their life-long savings, they took a beating for the team and some pretty hard lessons for others; after the collapse of promising digital currencies such as Terra Luna and TerraUSD, the risks lurking even closer. Even Shockingly so, The crash did not spare a giant like Bitcoin as it took a plunge, settling below $30,000, thus unfathomable financial losses.
The drop in the GPU market may sound like good news, but the same in the crypto market is not. As the scale seems to tip on the crypto side, It is still early to allude to a further drop in the pricing of graphic cards. Aside from cryptocurrency mining, the GPU market is affected by other factors. Regardless, the improvement is likely to last longer even after the crypto market starts regaining its foothold.
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