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Prices of graphics processing units in China fall following The Merge

By Darius McQuaid

15:28, 26 September 2022

China's national flag in Hong Kong
The GeForce RTX 3080 GPU has fallen in price from CNY8,000 to CNY5,000 – Photo: Getty Images

Graphics processing units (GPUs) used for mining cryptocurrencies have dropped to their “lowest ever” price in China.

The dramatic drop comes after the second largest cryptocurrency, ether (ETH), moved from the energy-hungry, proof-of-work (PoW) mechanism to the leaner, greener proof-of-stake (PoS) system – a process known as The Merge.

The GeForce RTX 3080 GPU, for example, has fallen in price from CNY8,000 ($1,119, £1,032) to CNY5,000, a merchant surnamed Peng told the South China Morning Post.

Peng said: “When the wave of bitcoin mining was at its peak, people from the mining companies just walked in the stores with cash and took away all the graphics cards we had in store. But now look at the stores. No one is buying new computers.”

GPUs, which are also used for computer games, have tended to increase in price when cryptos rise in value due to the fact they are well suited to mine PoW digital assets.

ETH to USD

SOL/USD

174.91 Price
+0.020% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652

ETH/USD

3,443.17 Price
-1.220% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

DOGE/USD

0.13 Price
+0.550% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

BTC/USD

65,965.65 Price
+0.110% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

‘Lowest point’

Liu, another merchant based in the Shanghai market, said GPUs had reached their “lowest point”, with some models actually dipping below their recommended retail price.    

Liu said: “I had a customer who bought an RTX 3080 card for CNY9,400 late last year, and now he has to sell it for less than half that price, even though that specific model is not suitable for mining.”

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A challenging year

GPU prices had already fallen following a crackdown on crypto mining by China in 2021. Meanwhile the crypto bear market has also dampened the demand for GPUs.

Peng noted that over the past few years his shop has seen GPUs going from one of the most in-demand computer components to being in surplus due to low sales.  

He warned potential buyers of unwanted secondhand cards that they “were operating at full capacity when doing mining jobs, so they are likely to have a number of problems such as the possibility of a sudden system crash”.

Markets in this article

ETH/USD
Ethereum / USD
3443.17 USD
-42.53 -1.220%

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The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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