Bitcoin and Ethereum Both Show Signs of Cooling Off
The evidence that demand for cryptocurrency is finally cooling off isn’t just coming from reports on GPU MSRPs. There’s direct evidence from recent activities on the Bitcoin and Ethereum mining networks as well. China’s recent crackdowns have hit both networks hard and the total amount of mining happening globally is dropping as a result.
Recent data from Etherscan, via PCGamer, shows how steep the drop-off has been since China announced a ban on payment companies from providing services related to cryptocurrency transactions. The initial ramp over the past year isn’t surprising given how hard it has been to buy a graphics card. The sudden fall-off isn’t exactly unprecedented — we’ve seen crypto bubbles collapse before — but it definitely recalls the way such surges tend to end.
The news from the BTC side of things is also interesting. According to PCG, Bitcoin difficulty has been adjusted based on the decrease in mining horsepower. It’s now 28 percent easier to mine a block than it was before. Direct Bitcoin mining is almost entirely handled by ASICs now instead of GPUs, but that’s actually part of what makes this telling. The entire market is cooling off, used GPUs are said to be appearing for prices near MSRP. Overall, the GPU market appears to be moving back towards something like normalcy.
China appears to be quite serious about cracking down on firms that engage in any crypto-related activity. Reuters reports that the Beijing office of China’s central bank, the People’s Bank of China, ordered Beijing Qudao Cultural Development Co Ltd to suspend operations as a result of suspicions that the company had engaged in cryptocurrency trading. BTCChina, which held the distinction of being China’s first Bitcoin exchange, has since ceased all cryptocurrency-related operations. 75 percent of all BTC mining reportedly takes place in China, so the nation’s decision to crack down is definitely having an impact on the wider market.
The big benefit for consumers, of course, will be the increased availability of GPUs. It may still take 6-12 months for backlogs to clear, however. Most of the PC gamers who would have bought Ampere cards have been stuck not doing so thanks to bad pricing. We’re probably looking at some months of elevated gaming-related demand after prices fall low enough to trigger increased gamer demand in the first place.
Personally, I can’t wait. I’ve never had an intrinsic problem with cryptocurrencies, but the way they’ve warped the PC gaming market for the past five years is anything but great. As of July 20, the GPU market will have been overheated for half the time (~31 out of 62 months) since Pascal launched. One doesn’t have to blame any specific company to greatly dislike the situation, and the high price of GPU upgrades has been a deterrent to anyone hoping to upgrade during the pandemic. Lower prices can’t come quickly enough.