Cryptocurrency mining activities are affected by trade wars between China and the United States
US President Donald Trump has decided to impose different tariffs on Chinese products. This not only has a profound impact on the world economy, but is also influencing the cryptocurrency mining activities.
The cryptocurrency market has had a bearish trend during the last year. This is something that has strongly affected the mining industry. An increase in the price of products used by mining companies could seriously damage their profitability. The latest tariffs on Chinese goods could lead to an increase in the price of graphics cards from AMD and NVIDIA.
The information was released by CNBC on September 27 to inform that the graphics cards built in the Asian country could have a price increase in the near future. The United States has imposed 25% tariffs on goods produced in China.
AMD and NVIDIA are two of the most important chip suppliers for the gaming market and also have a significant share of the mining crypts market. The rates will apply to graphic cards sold individually rather than those used on pre-defined PC systems.
Ryan Shrout of Shrout Reserach explained that this is an important problem because most of the graphics cards are made in China.
About him he mentioned:
"PC gamers will probably see an increase in prices for graphics cards with the implementation of this rate, an unfortunate side effect of the ongoing policies of the Trump administration.This is an unfortunate timing for NVIDIA as it was already under pressure to the prices of its new RTX product family, and it is unlikely that it or its partners will simply absorb the additional cost of the tariff. "
Bank of America Merril Lynch has informed that the Trump tariffs could increase the price of the company's new RTX cards between 5 and 10 percent in the coming months. Shorut explained that some manufacturers of graphics cards could move to Taiwan and avoid the tariffs imposed by the United States.
AMD issued a statement in which the company explains that it is working closely with customers and partners to mitigate the potential impact related to AMD-based pricing on products. However, they also stated that they do not expect US tariffs to have a significant impact on our business.
In addition, a spokesperson for NVIDIA said that some of its partners are transferring production to other countries with the intention of avoiding further problems. Nonetheless, Nvidia explained that the impact would be relatively little.
"There is relatively little direct impact on us." We understand that most of our partners have moved or are moving their assembling businesses to Taiwan and Mexico, which are not affected by tariffs. "
Older graphics card models may increase again in the market if prices increase for both NVIDIA and AMD. Another thing that can happen is that miners could choose ASIC miners rather than GPU miners, something that would be very good for the ASIC mining industry.
Another possibility is that investors invest in cryptocurrencies rather than in the construction of mining platforms. This could eventually generate price pressure and help virtual currencies recover from this bear market.