Falling markets might call bad news for holders and those who bought in late, however, the current falling market is having other external effects, effects that in turn might be seen as positive for a totally new base of customers.
Cryptocurrency mining relies on gaming hardware. Therefore, the price of graphics cards and graphics processing units (GPUs) tends to follow the price of the markets. It is a simple result of supply and demand. As the value of cryptocurrencies climbs, so does the potential reward for mining such currencies. Therefore, as the drive for mining goes up, so does the need for graphics cards and GPUs. As the demand for GPUs shoots up, so does the price. Likewise, the opposite effect occurs when the crypto markets fall.
According to a new report by Tech Radar, the price of many GPUs could drop by as much as 20% in the coming month. It’s bad news for hardware producers but good news for customers who wish to purchase new hardware to satisfy their gaming and cryptocurrency needs.
According to Tech Radar:
“We’ve seen the prices of graphics cards head back to normal levels in recent times, thanks to waning cryptocurrency demand, and this is a trend that’s set to continue according to the latest from the GPU grapevine – with price tags set to drop by around a fifth this month.
On the face of it, that’s great news for gamers looking to get themselves an upgraded GPU (or those building a new rig). However, talk of dropping prices as manufacturers try to clear their inventory of GPUs certainly makes sense given what we’ve previously heard about Nvidia, which apparently overestimated the demand from cryptocurrency miners, and has produced and shipped an excess stock of current-gen cards as a result.”
You can see the full report for yourself, here- https://www.techradar.com/news/graphics-card-prices-could-drop-by-20-thanks-to-cryptocurrency-slump
As I have said, this is an organic product of the supply and demand instilled by the cryptocurrency markets. As Tech Radar mention, one such reason for a price drop could be down to companies like Nvidia, who have overestimated this supply and who have manufactured far more products than was actually required. Because of this, then need to reduce the price of their remaining stock otherwise it is at risk of being made redundant.
The take home message? If you’re a gamer, after some new hardware, beware that GPU prices are set to sink soon. Likewise, if you’re a miner or want to get into mining, now may be your chance. The latter scenario however is as a result of a sinking market, therefore all prices are relative and as such, just because GPU prices are lower, it doesn’t make mining more financially viable as ultimately, the price of the reward is diminished too.