Global GPU price drops to compensate for falling Bitcoin mining revenue

189
SHARES
1.5k
VIEWS

As a direct result of the drop in bitcoin (BTC) prices, total revenue earned by miners in transaction fees and mining rewards fell to its one-year low of nearly $15 million on July 4. However, there has been a simultaneous decline in the prices of graphics cards or GPUs. Ready to help miners recoup their operating costs amid the ongoing bear market.

Since hitting an all-time high of $74.4 million on October 25, 2021, bitcoin mining revenue fell 79.6% over a period of nine months. In addition, a global chip shortage and the coronavirus pandemic pushed up the prices of the most important parts. A mining rig – the graphics processing unit (GPU) – further affects the bottom line of miners.

READ ALSO

Bitcoin mining revenue in the past year. Source: Blockchain.com

With card makers resuming operations across the globe, GPU prices have seen a sharp drop and some cards are selling for less than the MSRP. In May alone, GPU prices fell on average by more than 15% as supply exceeded market demand. Furthermore, the recent influx of GPUs has forced sellers to bring down their exorbitant prices on used mining rigs in the secondary markets.

GPU price trends over the past year. Source: TechSpot

Cointelegraph previously reported that many public bitcoin miners are well-positioned to survive a prolonged bear market as low revenue continues to keep operating costs at mining facilities high. As shown below, Argo, CleanSpark, Citadel, Marathon, and Roite are just some of the miners that have stable mining revenue to operating cost ratios — a fair sign of good health.

Monthly operating cash flow versus mining revenue. Source: Mysterious Crypto

In addition, the sharp drop in GPU prices opened up a smaller window of opportunity for small-time miners to purchase more powerful and efficient mining equipment. With the lower hash rate requirements of 203.6 exa hashes per second, miners now require less computing power to successfully mine a block on the Bitcoin blockchain.

related: Marathon Digital Mining Continues Despite BTC Price Drop

Despite the apparent drop in mining revenue, Marathon Digital Holdings continued to pile up BTC through mining, despite being “quite well insulated and well positioned”.

Speaking to Cointelegraph, Charlie Schumacher, VP of Corporate Communications at Marathon Digital, shared insights on its overall operations:

“For context, in Q1 2022, our cost to produce bitcoin was approximately $6,200. We also have fixed pricing for electricity, so we are not subject to changes in energy markets.”