According to a recent report by Bitpro Consulting, Ethereum mining companies have invested a staggering $15 billion in GPUs in the last one and a half years. This figure only increases when factoring in other components such as power supply units (PSUs), central processing units (CPUs), and even chassis.
Impact on Gaming Demand: This boom in mining and GPU hoarding was in line with the high demand for gaming, which also fueled the soaring price of GPUs. On average, a GPU cost $1,056 in 2021, compared to just a third of that price in 2019. According to figures from JPR, GPU sales totaled around $51.8 billion in 2021.
Profitability of Ethereum Mining: While Ethereum mining was profitable at times and reached its peak in the middle of 2021, its value has since plummeted by 70%. This is not good news for those who decided to enter the mining market late.
Impact on Transactions and the Environment: Even at its peak, Ethereum was becoming increasingly slow and expensive due to its near-capacity of daily transactions. Additionally, the environmental impact of mining has been a constant issue with cryptocurrency, with carbon emissions playing a major role.
Investor Losses and Environmental Concerns: The report also highlights the impact on investors unable to recover losses due to GPUs and other mining equipment costs. One example in the Bloomberg article details a man who invested $30,000 in cryptocurrency mining hardware in the middle of 2021 but only earned $5,000 in the first year.
In conclusion, the rapid decline in the value of Ethereum, combined with the environmental impact and waste of GPUs used for mining, has resulted in many miners and investors facing significant losses. As the crypto market continues to evolve, it will be important for miners and investors to consider the long-term viability and sustainability of their investments.