The Merge Is Killing Nvidia GPU Prices (2024)

The Nvidia GPU prices have turned on their head this year. As the company braces for another price slip for its RTX 30-series GPUs, the concern over how massive these declines could be in the future only grows deeper.

GPU prices have slid over the past week. While crypto mining remains profitable in some ways, the value of the Bitcoin downturn rose by 30% and Ethereum dropped by almost 40%. “The decline in the gaming GPU revenue was sharper than anticipated for Nvidia, driven by both lower units and lower ASPs (average selling prices),” said Colette Kress, chief financial officer and EVP of Nvidia.

The Ethereum merge (shift from proof of work to proof of stake) significantly affected almost tens of millions of GPUs purchased in the past four years to mine ether. Some miners even planned to move to Ethereum Classic but couldn’t attract the mass of NFT or decentralized finance (DeFi). Moreover, the overall vulnerability has been speculated after the transition to POS (proof of stake).

Currently, the overall GPU unit shipments have declined by 15% from last quarter. Half of this slowdown comes from the softening PC market, with researchers reporting a sharp dip every year, almost 12.8% for 2022, and partly from the vanishing crypto miners.

Ethereum merge and its effects

The merge represents the shift of Ethereum’s proof of work (POW) to proof of stake. It’s a new system for authenticating crypto transactions. According to the Ethereum Foundation, this concept is introduced to reduce Ethereum’s energy usage by 99%. “I am personally very excited about the Ethereum Merge and the upgrade to the proof of stake consensus mechanism, primarily because it will lower the network’s footprint by 99%. In case of Ethereum, this would mean returning 0.1% of global electricity usage to people,” said Pratik Gauri, co-founder & CEO, 5ire.

Moreover, Ethereum POS also limits the stake and cost, unlike POW. Well, it doesn’t come with the certainty of smashing the POW but accounts for clear signals from entrepreneurs and decision-makers so far. On the flip side, this may swap away hundreds of billions of dollars in value (Ether’s market cap is close to $200 billion and many worthy tokens). The Ethereum merger is expected to happen around September 15.

Buy Nvidia stock now

Amidst intensified inflation, low demands, pandemic and supply chain limitations, Nvidia went through tough times since the beginning of this year. The past six days have been significantly rough for Nvidia, with share pricing falling rapidly below expectations because of the merger. After the disappointing second-quarter earnings that couldn’t meet analysts’ expectations in August, Nvidia was smacked with a new export license requirement for its future chip sale with China. On September 1, Nvidia’s stock dropped to a 52-week low of $132.7 after the company announced the new export license.

Nvidia is one of the biggest technology companies in the global markets, with a market cap of $450 bn. Analysts proclaim this rough patch as short-term volatility for investors against the bullish possibilities in the near future. So it would be safe to buy a small portion in Nvidia today.

Nvidia has a way out

Although the present condition of Nvidia appears gloomy from its declining stocks and GPU prices. But fortunately, the company has its own way of compensating for the losses.

The price of Ethereum has been down since mid-2021 and that has remained a uniform indicator of GPU prices. However, despite the setback, the company has something good in store to better its steeping market state – the new generation of graphics cards.

Last month, the value of these graphic cards dropped, when compared to the previous generations. That’s not unfortunate but rather a green signal for AMD RX 6000 and Nvidia RTX 30 series graphics cards. What’s more exciting is the upcoming launch of AMD’s RX 7000 graphics cards in the second half of 2022.

Nvidia is also planning to launch the RTX40-series, clearly portraying a strong plan. Even though GPU prices have fallen, Nvidia has clear plans to buckle up with new generations every two years, either in September or October. This launch will surely make up for its losses against the present shaky GPU prices.

Access all our open Survey & Awards Nomination forms in one place >>