Will GPUs return to their normal price after Ethereum can no longer be mined with GPUs? Unfortunately, it depends on more factors

If all goes according to plan, during the first half of 2022 Ethereum will be updated to version 2.0, which will replace the Proof of Work (PoW) transaction verification system that uses the GPUs with the Proof of Stake transaction verification system. (PoS) in which users are selected to verify transactions instead of competing with brute force for whoever verifies it first as happens with PoW. This will make ETH no longer mineable with GPUs, so miners will stop buying thousands and thousands of GPUs to mine ETH. Will this affect the price of GPUs? We analyze it below:

What will happen to the price of GPUs when ETH migrates to PoS? There are two possibilities:

1 – Most likely: Mining stops being profitable and the vast majority of miners retire

The biggest possibility is that mining will cease to be profitable once Ethereum goes to the PoS validation system as no other cryptocurrency is ready to stay profitable if the entire Ethereum hashrate is passed to that cryptocurrency.

Even if split between other popular currencies such as Ergo, Cortex, Ravencoin, Firo, Beam, and ETH Classic, the hashrate that each network would receive would still be too large for the distribution to be profitable, so it would no longer be economically viable. cryptocurrency mining until a large number of users withdraw and a few are left again in these alternative cryptocurrencies. In addition, the mining of several of these cryptocurrencies requires more VRAM than the mining of ETH, so many GPUs would not even be able to mine some of these cryptocurrencies, further narrowing the options and further reducing the chances of obtaining profitability.

2 – The least likely: Some other currency “magically” begins to be profitable even with the great hashrate that ETH will have and mining will continue to be attractive to miners

While new cryptocurrencies always appear with which reasonable profits can be made by mining, it would be very rare for one to appear that is profitable with the hashrate that the Ethereum network handles today. The possibility exists, although it is extremely low.

Leaving mining aside, there are more factors that affect the low stock

During the pandemic there were two factors other than mining that further affected the stock of GPUs. The minor is that more people started playing on PC, with Steam surpassing its record of concurrent players on multiple occasions during these two years, and the major is the already known shortage of components, which not only affects the PC hardware industry. , but also affects other industries such as automotive, where several companies had to stop manufacturing certain models due to lack of components for their central computer. The demand for GPUs by gamers is still extremely high and the supply is still very low, so even leaving aside the miners, we do not believe that GPUs will be obtained at the price suggested by AMD, Nvidia or in the future Intel at least until the end of 2023.

In this way, we recommend not to get delusional since when ETH mining is finished, a lot of GPUs at a good price will not magically appear on the market, at least not new, for a long time to come. Possibly if it is flooded with used GPUs, which can be a risk to buy, so each one will see whether to take that risk or not.

What do you think will happen to the price of GPUs once Ethereum mining with GPUs is over? Will the market improve or will it remain just as bad?