Mining Ethereum Using GPU No Longer Profitable as Price Slides

The year-end rally in cryptocurrency price in 2017, has opened doors for many crypto enthusiasts to mine cryptocurrency and earn hefty profits. But the scenario has changed as the prolonged bear phase and rising cost of energy has wiped out the profitability. And, many small miners are now exiting the space as they are unable to cover their cost. This has also raised concern about the protocol’s future stability.

According to a report published by Susquehanna, a global quantitative trading firm, those mining Ethereum using pricy graphics processing units (GPU) are not able to earn profit from the mining operation. Against last summer, when miners were able to pocket $150 in profits for each mined Ether, the profits for this month has turned to zero.

The drop in hash rate has made the situation worse. A higher hash rate is better for miners, as it increases the probability for miners to find the next block.

Susquehanna’s semiconductor analyst Christopher Rolland, said in a note to clients:

“The combination of those factors means that mining Ethereum using a GPU, Nvidia’s flagship graphics card, is “no longer profitable.” 

As a result of this, Nvidia is losing out on sales to other chip makers. The crypto related revenue for the company declined by over $100 million quarter over quarter. Rolland also predicted that the company’s crypto related revenue might be zero in the third quarter.

“We estimate very little revenue from crypto-related GPU sales in the quarter, consistent with management’s prior commentary that they were including no contribution from crypto in their C3Q18 outlook. 3Q18 mining profitability continued to decline, as Ethereum prices have fallen more than -70% since the beginning of 2018.”

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