The arrival of the Merge will cause the consensus protocol PoW to replace PoS, rendering millions of GPUs unusable. Amid a weakened gaming market, that event has affected sales of those devices negatively even more.
The bullish crypto market affected the prices of graphics processing units (GPUs), causing them to rise considerably. Although the best-quality had a premium of up to 114% above their retail prices, the upcoming Ethereum Merge may end that trend.
The Merge is the upgrade of the Ethereum network that will change its consensus protocol to proof of stake (PoS). The mining activity will no longer be an option since PoS will serve that purpose.
The Merge to End the Sales of Overpriced GPUs
The creation of GPUs initially aimed to serve in gaming, graphic design processing, and 3D modeling. However, their demand for mining made the supply insufficient, causing the prices to skyrocket by up to 114%.
The rebound in the price of Ether (ETH) to new historical levels also influenced the overpricing of GPUs. Many miners thought they could profit significantly from the second-largest cryptocurrency by market capitalization.
That happened before the change in the consensus protocol of the Ethereum network. Since the Merge upgrade will cause proof of work (PoW) to replace PoS, millions of GPUs bought over the last four years will be unusable.
However, miners might stop using this method, as there has been a considerable increase in the hash rate of Ethereum. Therefore, that represents an alternative that uses PoW to which they can move their operations.
Wholesalers in China Face Problems with the Sales of GPUs
Besides rendering millions of devices unusable, the Ethereum Merge has also reduced the export of GPUs by 15% in the last quarter.
Amid a weakened gaming market, the upcoming Ethereum upgrade affects sales of GPUs negatively even more. According to GPUTracker.eu, the prices of some powerful equipment have dropped by double digits. RTX 3080 Ti, one of the favorites among miners, went from about USD 2,000 to less than USD 1,200.
That process that Ethereum is undergoing has caused problems for Chinese GPU wholesalers, who cannot sell them fast enough.
That situation has also affected Nvidia, the manufacturer of those GPUs, which suffered a drop of 33% in year-on-year profits. However, they seem happy about what is happening, as they created their devices for gamers and similar customers, not for mining.
Miners know of the growing relevance of cryptocurrencies like Bitcoin (BTC) and Ether in the world economic system. That has led many to acquire graphics processing units, initially intended for gaming, to conduct their business. However, the Ethereum Merge will render that equipment unusable for the extraction of ETH.
Ether is trading at around USD 1,513 and has accumulated a 9.2% loss over the last 24 hours. While its daily trading volume is above USD 19.05 billion, its market capitalization is about USD 182.43 billion, According to CoinGecko.
By Alexander Salazar
