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The new data released by the global trading and technology company Susquehanna revealed that Ethereum's mining profit earned per month using a GPU rig dropped to zero in November, falling from around $ 150 in the summer 2017.
The data indicate that, in addition to the dominant position of the most efficient ASIC miners who dominate the Proof-of-Work mining market, the GPU extraction of ethereum and other cryptocurrencies is affected by the prolonged crisis in the encrypted market.
Impact of the recession
In August, CCN reported that Nvidia closed the cryptocurrency arm amid concerns over the severely diminished profitability of GPU production equipment in a market almost completely dominated by ASIC miners such as Bitmain's Antminer series. The situation continues to persist while Susquehanna's semiconductor analyst Christopher Rolland, quoted in a report by CNBC, has recently stated that revenue from the company's encryption will remain "close to zero" in the third quarter of 2018.
Previously, the extraction of ethereum as a source of auxiliary income using GPU mining kits could invite investors up to $ 150 per month for extraction kits. Having relatively low barriers to entry, this has earned him the favor of small-scale entrepreneurs and cryptic enthusiasts who have opened small-scale mining activities in everyday spaces to capitalize on the boom in encryption.
However, according to Susquehanna, this situation has changed completely, with the profitability of GPU extraction that fell to zero in November 2018.
On Tuesday, in a note to customers, Susquehanna noted that the situation was caused by a unique combination of risk factors, including the general cryptographic market crisis, which saw the price of ethereum fall by 70% from its December historical high and the declining competitiveness of GPU miners in the face of greater efficiency of ASIC miners.
Nvidia takes a hammering
Perhaps no market operator felt the pain of falling profitability in GPU mining compared to Nvidia, which saw its GPU manufacturing business receive an unprecedented boost with the ethereum bull run last year. At the time, the company's share price soared by the increased demand for cryptocurrency mining equipment as investors went to get a piece of the bitcoin mining cake.
Since the beginning of the bear market, however, several mining basins have left the market due to lower profitability and the miners are increasingly trying to squeeze as much efficiency as possible from their mining rigs, as marginal margins can often be the difference between staying profitable or going red from month to month. In this context, the giant ASIC Bitmain has swallowed the mining market even more with its Antminer series, leaving the miners of the GPU – significantly less efficient than the ASIC miners – as an increasingly neglected outlier.
Despite announcing its exit from the cryptocurrency market, Nvidia continues to suffer because of its exposure to the GPU mining market, with its stocks of 23 percent compared to last month. Speaking in the note sent to Susquehanna's customers on Tuesday, Rolland said:
"We estimate only a few revenues from cryptographic GPU sales in the quarter, consistent with management's preliminary comments that did not include any crypts contribution in their C3Q prospects." Third-quarter mining profitability continued to decline, as prices of Ethereum fell by more than -70% from the beginning of 2018. "
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