Prices for graphics processing units (GPUs), which are frequently used for mining cryptocurrencies like Ethereum (ETH) and Bitcoin (BTC), have decreased in China as institutional investors accept the Ethereum network’s switch to a proof-of-stake (PoS) mining consensus.
According to a South China Morning Post story, the historically momentous Ethereum Merge on September 15 has considerably reduced the price of the once-highly coveted Nvidia GeForce GPUs. A price drop of the GPU from 8,000 yuan ($1,118) to 5,000 yuan ($698) in just three months has been observed by many miners in the country.
Businesses claim that mining companies continued to buy GPUs while Bitcoin (BTC) mining was at its peak in China. However, many businesses have claimed that even computer sales are down and that there is an abundance of GPUs in the market. Prices for entry-level RTX 3080 cards from producers like MSI have also decreased by about 2,000 yuan in the last two months. As per the businesses, the Ethereum Merge could be responsible for a further drop in GPU prices.
The proof-of-work (PoW) mechanism on the ETH blockchain was replaced by the PoS layer known as the Beacon Chain after the Ethereum Merge. With this, ecosystem members who would stake ETH to become the new validators of the network would replace miners who previously processed transactions and produced blocks.
Lower demand affects more than just the in-store retailers. GPU prices have also decreased on Taobao and JD, two online retail platforms. Prices for RTX 3080 cards on these platforms have gradually decreased from three months ago by a few hundred yuan.
A recent report offers another another piece of evidence that cryptocurrency has not been totally banned in China since the government announced a systematic crackdown on it in September 2021. The the Beijing No. 1 Intermediate Court has ruled that virtual currencies like Litecoin (context: a debt-case involving Litecoin) are nonetheless regarded as “property” despite being a part of the digital world.