Miners in China sell graphics cards at a loss

Graphics cards are among the components that are most difficult to obtain, due to the current lack of circuitry. The demand for both the latest generation graphics cards from Nvidia and AMD and older is huge, not just among private individuals. Large quantities have been bought to break cryptocurrencies, including in China. In the first quarter of 2021 alone, it is estimated that a quarter of all cards from third-party manufacturers have been sold to data centers for mining cryptocurrencies.

The interest of miners however, it seems to be cooling down, probably as a result of the Chinese authorities taking the hard line. Lots of graphics cards are sold at relatively cheap prices, including through groups for mining. HKEPC (via Techspot) shows screenshots where, among other things, the Nvidia Geforce RTX 3070 is sold for 3,120 HKD, which corresponds to approximately SEK 3,450.

Right now look miners out to try to sell off larger lots to others miners, but it’s only a matter of time before the graphics cards flood the regular second-hand market. This can have a positive effect on supply, but with the proviso that the components sold have been heavily loaded when used to break cryptocurrencies. Despite low prices, they are not necessarily attractive to use in their new gaming computer, for example.

Prices for new graphics cards have begun to decline, although they are still not close to manufacturers’ target prices. If the second-hand market is flooded at the same time as retailers gain better access, the industry may face a similar situation as during the period 2017–2018. Large surplus stocks then arose when the market was saturated as a result of the then cryptocurrency wave slowing down.

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