Cryptocurrency Crash: Crypto Crash Leads to Hardware Fire

Mumbai: Worst bearish streak in crypto Having a ripple effect on currencies around the world prices of hardware which supported their complex mining process digital asset,

Gone are the days when crypto currency miners and hardware makers participated in mullahs amid the recent boom in digital assets. In the wake of declining crypto prices, mining such digital assets has become impractical, resulting in miners dumping their high-end equipment for resale. Market Due to which the prices have come down.

Sample this: Until a few months ago, if you needed a high-end graphic card used to mine new bitcoins, it would have cost up to ₹2 lakh on the black market. Now, users can buy the same cards online for their sticker price of around ₹1.1 lakh per unit. This is a drop of 45%.

The dumping of these high-end pieces of hardware into the resale market by the crypto community has led to a drop in the price of graphics cards.

“Prices are falling every week,” said Vibhor Agarwal, chief executive officer of Supertron, one of the largest distributors of computer hardware in India. “The much-awaited price correction is starting to happen.”

Cryptocurrency mining requires users to solve a complex set of problems on a computer, after which they unlock or mint new cryptocurrencies such as bitcoin. Solving these complex algorithms requires high computing power and miners usually use graphics cards designed for intensive gaming for this task. With the fall in prices, mining of cryptocurrencies has become impractical as the process is too expensive.

The selloff in major cryptocurrencies began in April as global central banks began tightening their balance sheets and raised interest rates. Ultra-adjustable monetary policies by central banks in developed countries, which weigh down their currencies, have been one of the drivers of demand for crypto, which has benefited from the perception of short supply.

Bitcoin, the most popular cryptocurrency, has dropped from $61,000 since November 2021 to now $20,789. Ethereum, another popular cryptocurrency, has fallen nearly 70% since April to $1,203.

Crypto mining is an expensive process. Apart from the high-end hardware, it also consumes a lot of power. Two years ago, in the midst of the crypto boom, many miners added new rigs to maximize their returns. A mining ‘rig’, which is essentially a bank of graphics cards put together for mining, can contain anywhere from a few to tens of cards.

As miners exit the market – and even dump the cards they have in the resale market – demand for graphics cards has reached levels before the last crypto boom seen in 2019 began, According to Deepak Gupta, the country’s leading Zotec Technology Ltd. for graphics card manufacturer.

“The long waiting periods for these pieces of hardware have become a thing of the past,” Gupta said.

From a lead time of 16 weeks in 2020 and 2021, suppliers in India can now ship orders within weeks of placing them. The cards are not manufactured in India and the market is completely dependent on imports.

Prices have come close to the Manufacturer’s Suggested Retail Price (MSRP) in the market. For example, a card with an Nvidia RTX 3080 Ti chipset sells for around Rs 1.15-1.2 lakh in India, compared to the manufacturer’s MSRP of ₹1.11 lakh, Gupta said.

“The market is getting back to its original size,” he said.

Until earlier this year, the demand for these graphics cards was so high that their shortage fueled a war between miners and gamers. Gamers claimed that the miners were hoarding hardware specifically designed for gaming and locking primary users out of the market. Now, gamers are having the last laugh.

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