Crypto Bear Market: Ethereum GPU Mining is no Longer Profitable, Analysis Shows

The mining of Ethereum using a graphics processing unit (GPU) is not profitable anymore, as revealed by Susquehanna, a U.S-based world trading & technology company. According to a report by CNBC on November 13, 2018, Susquehanna's data shows that the prolonged decline in digital currency markets and slumping network hashrates is the main reason for the profit reduction.

From the analysis conducted by Susquehanna, monthly profit for all ETH miners that use GPU-based setups struck almost $0 at the beginning of this month, down from around $150 in July last year. Susquehanna shows the reduction in ETH's price as a key factor, with the Altcoin at present exchanging hands at $205, down around 85% from its bullish record of almost $1,350 hit on January 15, this year.   

Profitability of Mining Using GPUS Falls   

As pointed out, nevertheless, on July 17 last year, when Susquehanna's statistics show a $147 profit for GPU miners, the asset was exchanging hands at almost $175, just marginally lower than the current valuation.   

To unpack this pattern more, Susquehanna properly ascertained a second factor and said that a higher hashrate is profitable for miners since it multiplies their chance of computing a block and being paid in Ethereum.   

   

Susquehanna’s graph indicating reduction in ETH mining profits. Source: CNBC

Christopher Rolland, Susquehanna's semiconductor analyst said that in this circumstance, applying chipmaker Nvidia's GPU card isn't "profitable anymore," revealing that the firm's cryptocurrency-derived revenue is down almost $100 million each quarter. According to his forecast, in the Nvidia's 3Q report soon to be released, the revenue is likely to be "near to zero."   

“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.”   

Experts from Trefis, an analytics company, have predicted that Nvidia's total Q3 revenue will increase, even though Susquehanna forecasted that overall sales from crypto-related operations will keep moving downwards. 

However, in August this year, Nvidia stocks dropped amidst a fall in crypto mining as markets registered losses.