May’s crypto crash and China’s crackdown on cryptocurrency mining have had knock-on effects on the market for GPUs, according to ASRock, a manufacturer of graphics cards.
According to Digitimes Asia, ASRock reported that while it expects sales of its graphics cards to grow rapidly this year, it’s seeing shrinking demand from China’s crypto mining sector. It follows a crackdown on crypto mining from the Chinese authorities that’s seen miners forced to cease operations in several provinces, including Yunnan and Xinjiang.
China’s clampdown on crypto mining was one of a number of factors that influenced last month’s crypto price crash, which saw the price of Bitcoin drop to as low as $32,000.
Gamers vs. miners
ASRock’s graphics cards aren’t generally used for Bitcoin mining; dedicated ASIC machines have superseded them. Instead, they’re mostly used for mining Ethereum, which fell to a price of around $1,900 during May’s crypto crash.
Like ASRock, graphics card chipmaker Nvidia has struggled to balance the competing demands of crypto miners and its core customer base of PC gamers. The company has resorted to throttling hash rates on its own GeForce graphics cards in a bid to limit their appeal to crypto miners while launching the CMP, a dedicated processor for Ethereum mining.
Ethereum’s GPU Mining Landscape is Bracing for Change
In a recent interview with VentureBeat, Nvidia CEO Jensen Huang explained that “CMP effectively increases our supply,” while having the added benefit that it can’t be resold to GeForce customers because it doesn’t play games. “These things we learned from the last cycle, and hopefully we can take some pressure off of the GeForce gaming side, getting more GeForce supply to gamers,” Huang added.
The Ethereum 2.0 upgrade will see the Ethereum network move from a proof of work consensus mechanism, which requires mining, to a proof of stake model, which doesn’t. Despite the potential impact on Nvidia’s business, Huang is “excited” about proof of stake; he also enthused about the prospect of a blockchain-based augmented reality metaverse.