Bitcoin and Ethereum Both Show Signs of Cooling Off

Reports on GPU MSRPs aren’t the only evidence of a slowing down in cryptocurrency demand. Recent activities on the Ethereum and Bitcoin mining networks also provide direct evidence. Both networks have been hit hard by China’s recent crackdowns, and there is a drop in global mining.

Recent data compiled by Etherscan via PCGamer shows the steep drop in cryptocurrency transactions since China banned payment companies from offering services. Given how difficult it is to get a graphics card, the initial rise over the past year shouldn’t be surprising. Although the sudden drop-off isn’t unprecedented, we’ve seen crypto bubbles burst before. However, it does recall how such surges end.

Interesting news is also coming from the BTC side. According to PCG the difficulty of Bitcoin has been adjusted due to a decrease in mining power. It is now 28% easier to mine a block of Bitcoin than it was previously. ASICs are now handling direct Bitcoin mining almost exclusively. However, that’s only part of the reason why this is so important. As the market cools, GPUs used for mining are being sold at prices close to MSRP. The GPU market seems to be returning to normalcy.

China seems to be serious about crackingdown on crypto-related firms. Reuters reports that Beijing Qudao Cultural Development Co Ltd was ordered to cease operations by the People’s Bank of China’s Beijing branch. This decision was made after it was suspected that the company was involved in cryptocurrency trading. BTCChina, China’s first Bitcoin exchange was a distinction. It has since stopped all cryptocurrency-related operations. According to reports, 75 percent of all BTC mining takes place in China. This is a clear indication that the country’s crackdown has an impact on the market.

Consumers will see the biggest benefit from increased availability of GPUs. However, it may take between 6-12 months for backlogs of orders to clear. Bad pricing has prevented most PC gamers from purchasing Ampere cards. After prices drop low enough to stimulate increased gaming demand, we could see some months of high gaming-related demand.

Personally, I cannot wait. Although I have never had an inherent problem with cryptocurrency, the way they have warped the PC gaming industry over the past five years has been a disaster. The GPU market will be half-heated by July 20 (31 of 62 months since Pascal’s launch). It doesn’t matter if a company is unhappy with the situation. The high cost of GPU upgrades has made it difficult for anyone who wants to upgrade during this pandemic. It is impossible to get lower prices quickly enough.