This year Ethereum’s price surged, so much so the cryptocurrency reached an all-time high of over $400, and that led various cryptocurrency enthusiasts to purchase AMD and Nvidia GPUs in early June, as new small-scale cryptocurrency mining operations started to appear. Demand was so high it led to a GPU shortage.
According to a report from RBC Capital Markets, the growing mining market led to $100 million worth of GPU sales for Nvidia, in only 11 days. These sales then motivated investors to get in on the craze, and both Nvidia and AMD’s stocks started to surge. In late June CNBC’s Jim Cramer, as reported by CCN, loathed investors for doing this as, according to the TV commentator, the cryptocurrency’s growth wasn’t sustainable.
At the time one Ether token was worth $334.79. The token’s value soon fell to a low of $134.21 this month and, at press time, one token is worth $222.04. The price somewhat recovered, but it’s now too low for some small-scale miners to make a profit, considering other factors. As such, some are now selling their GPUs.
Motherboard searched for Ethereum mining rigs sold on eBay and found that the number of sales has been growing. There were 57 completed sales in May, 125 in June, and there are nearly 300 in July so far. At press time, there are 534 search results for “Ethereum Mining Rig” on the marketplace. The number of popular GPUs for sale on the market is now higher than expected.
One could think the motive behind the surge is growing interest in the cryptocurrency, but sellers contacted by Motherboard claimed mining just isn’t profitable. One told Motherboard he used his graphics card to mine Ethereum for about a month but decided to sell because he was getting out of the market. Another, stated he realized mining wasn’t going to be worth it.
“I was going to build a mining rig but realized it was not going to be profitable.”
It’s getting harder to make money mining
Ethereum’s Ether token surged from about $8 to over $400 this year, and that means a lot more people started mining, but only sizeable operations seem to be making it. According to data from Etherscan, mining difficulty has been surging, so much so that the highest average difficulty, of 1,304.917 TH, was recorded yesterday, July 21. In early June, the average difficulty was at 561.001 TH.
Moreover, miners have to deal with electricity costs and these, along with Ethereum’s price drop and increase in mining difficulty forced most hobbyists out of the market, as multi-GPU mining rigs aren’t paying for themselves as quickly as they would’ve a couple of months ago. According to math done by Motherboard, a graphics card that earned $5 a day a few months ago now earns less than $2 a day, minus power costs.
Those who believe in the cryptocurrency’s future keep on mining, believing that even though they’re not earning as much money now, Ethereum’s value will increase and it will all be worth it. Others, however, don’t want to wait and see what happens and, as such, decide to sell.