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Nvidia Cards Tumble in Price as Crypto Miners Capitulate

The price of Nvidia GPUs is tumbling as crypto miners capitulate, with prices on the secondhand market down by as much as 50%.

The price of NVIDIA shares fell by 15% this week, down from $173.04 on Monday to $145.96 by Friday. 

Challenging market for Nvidia

The market for Graphics Processing Units (GPUs) is in difficulty as tougher macroeconomic conditions force cryptocurrency miners to capitulate. Miners which had previously espoused “diamond hands” are reversing course, selling tokens at the bottom to cover operating costs or loans that are now past due.

In June the cryptocurrency mining company Bitfarms sold 3,000 bitcoin to a value of $62 million to improve liquidity. Some miners, both big and small, have gone further still, selling off the mining equipment itself.

The fire sale is causing a drop in the value of GPU miners on secondary markets, even as Nvidia’s recommended retail price remains unchanged. Tristan Gerra, an analyst at financial services firm Robert W. Baird outlined the problem to Bloomberg earlier this week.

“People don’t want to buy GPUs knowing it’s potentially going to be obsolete in two quarters,” Gerra said. “We believe that crypto-related purchases have steadily declined.”

Pierre Ferragu, of New Street Research, added that around $3 billion worth of graphics cards that had been bought by miners since the start of 2021 and those same cards “are now flushing into the secondhand market.” 

As the value of mining equipment falls, a secondary risk emerges. In many cases, the loans which mining companies have taken out have been collateralized by the mining equipment itself. As the value of equipment continues to fall, the collateral value evaporates.

Speculation rampant

With the price of cards falling, speculation is mounting that Nvidia has suspended production on its RTX 3080 12 GB card. According to graphics cards enthusiast @Zed__Wang Nvidia is continuing to produce the
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