Steep decline in cryptocurrency market has miners dumping their GPUs on Ebay

Ethereum, one of the most popular cryptocurrencies, is becoming more difficult to mine. At the same time, volatility is rearing its welcome head, and the value of Ethereum is now less than half of what it was around a month ago. As a result, profitability is way down, and some miners are putting their GPUs up for sale on second-hand sites such as Ebay, CoinDesk reports.

While it is difficult to predict anything when it comes to cryptocurrencies, we are cautiously optimistic that GPU pricing should start trending back to normal in the coming weeks. That could change at the drop of the hat, of course, but with the way things are now, miners are less motivated to stock up on GPUs and mine Ethereum.

That was not the case a month ago when Ethereum reached an all-time high of $300 before recording another high of more than $400 a short while later. More and more miners jumped on the crytpocurrency bandwagon in hopes of making some extra dough, and maybe even eventually striking it rich, as some early adopters of Bitcoin did. But since then, Ethereum has fallen in value, declining to a low of $133 over the weekend. It's currently trading at around $170-$180.

It has also become more difficult to mine over the past month. Have a look at the steep trend line from the beginning of June until now:

From our vantage point, the difficulty in mining has caused about a 10 percent drop in profitability, while the falling price has made Ethereum mining 50 percent (or more) less profitable. Power costs remain constant, so where an RX 580 might have grossed up to $5 per day next last month, it will now only gross around $1.70. That means instead of a net profit of $4, it's now down to a net gain only $1.25 (at a power cost of $0.10 per kWh). Generally speaking, it looks like a typical miner might have to wait six months or more to pay for a GPU hardware investment, compared to two or three months.

This is a good thing for gamers. While crytpocurrencies like Bitcoin (SHA256) are far more easily mined on ASIC hardware, othere's like Ethereum (Dagger-Hashimoto) and ZCash (Equihash) use algorithms that are resistant to ASIC hardware. Combined with Ethereum's spiking value, miners went running for the hills with as many GPUs as they could carry in what became a modern day gold rush.

This resulted in a shortage of many desirable graphics cards from both AMD and Nvidia. The best bang-for-buck options for gaming are also great options for mining, but there just aren't enough parts to meet the demand of both markets. Cards like the Radeon RX 570 have been out of stock or grossly overpriced by third-party vendors, such as this Gigabyte Aorus Radeon RX 570 going for $550. And that's not even the most expensive RX 570 SKU out there. PowerColor's Red Devil variant is listed on Newegg (through a third-party) for $639.

It's a crazy situation, but here's hoping that recent events restore some sanity to the graphics card market. There's an RX 580 8GB currently in stock at Newegg for 'only' $310, which is still way over MSRP, but the coming weeks should see inventories and prices start to return to normal. If you'd rather not wait for inventory levels to even out, you can also check second-hand sites for deals.