V - Cryptocurrency Miners Are Eagerly Awaiting News From Nvidia
The news of NVIDIA Corporation (NASDAQ: NVDA) potentially restarting production of graphics processing units (GPUs) production is very good news for all those hoping for bitcoin mining GPUs. In fact, this is good news for gamers around the world as it could ease some of the pressure on the demand for the RTX 3000 graphics cards.
The cryptocurrency market is very important for Nvidia which keeps a close watch on the development in the crypto-mining world, just like Amazon (NASDAQ: AMZN), Facebook (NASDAQ: FB) and a lot of tech giants out there as well as companies using cloud computing for bitcoin mining. All that news made the company think it might be a good time to restart making new models of mining dedicated GPUs (or CMPs how they are called at Nvidia), or in other words, graphic cards with removed video output which is what makes them cheaper.
Current Nvidia’s graphic card models
The reason for all the excitement is that several last Nvidia graphic card models like GeForce RTX 3080, GeForce RTX 3090, GeForce RTX 3070, and GeForce RTX 3060 Ti sold out almost immediately after being released to retail. Having in mind the minimum typical number of GPUs required for mining is around six to eight, it is clear where all the graphic cards went, leaving many PC gamers who wanted to upgrade their gaming systems very frustrated. This high demand paved a way for some resellers, so finding a graphic card at a regular price became quite a challenge. Even with the prices starting from $399 for GeForce RTX 3060 Ti and going as high as $1,499 for GeForce RTX 3090 did not stop the miners. Even with inflated third-party prices of graphic cards, they can still make a profit after about 10 months.
Where did all this demand come from?
On the other hand, Nvidia’s CFO Colette Kress said the company is not completely clear how much demand for RTX 30 series comes from the mining segment. Even more, the company is not sure that mining is a big part of their business, so they turned to the gaming demand, which might be easier to quantify. The conclusion is that the gaming demand is larger than the company’s current supply. When you add mining demand to it, further pressure on the RTX 3000 graphics cards is the result.
What about other GPU makers?
Even though the GPU makers are not dealing with cryptocurrencies directly, their products are finding plenty of use in many fields, starting from the gaming industry, artificial intelligence, data centers, and finally software mining of cryptocurrencies. All these computing-intensive fields have at least one thing in common, they all require a lot of computing power and that is where the GPUs come in. That is how GPUs became the fundamental piece of hardware for everyone in the mining business, from those wanting to buy stock with bitcoin to those providing bitcoin merchant services. Therefore, their makers became the driving force with insufficient capacities to satisfy the market. So, besides Nvidia, there is AMD or Advanced Micro Devices, Inc. (NASDAQ: AMD) with its famous Radeon graphics cards. Even gamers with little experience know about the rivalry between Nvidia and AMD in the graphic card department.
More and more crypto supporters
Even Tesla’s (NASDAQ: TSLA) and SpaceX’s CEO Elon Musk stated he regrets not getting into bitcoin eight years ago. PayPal Holdings (NASDAQ: PYPL) also only recently boarded the bitcoin train last November and achieved a record in January with $242 million in the digital currency changing hands in a single day. Elon Musk’s might not feel so strongly about other cryptocurrencies, but he expects bitcoin to become accepted by the conventional financial market, as even the CEO of Visa (NYSE: V) just described cryptocurrencies like bitcoin as “digital gold”, announcing the company could eventually use digital currencies in the same way it processes traditional money. All of these trends can only translate to a higher demand for GPUs.