Morgan Stanley Predicts 2018 Plunge in GPU Mining Sales
Cryptominers will likely purchase fewer graphics cards in 2018 as ethereum's hard forks make mining a less profitable exercise.
An analyst for Morgan Stanley is predicting that the sale of graphics cards (GPUs) for cryptocurrency mining will fall next year, signifying a potential hurdle for sellers like AMD.
Joseph Moore, according to coverage from Barron's and Benzinga, suggested in a new report published this week that a mixture of network upgrades – including a decline in the overall block reward on the ethereum network from 5 ETH to 3 ETH – would have a tangible impact on miners, who engage in an energy-intensive process to create new transaction blocks.
As a result, according to Morgan Stanley, companies such as AMD could see their mining-related sales plunge by as much as 50% next year.
Moore wrote:
The Morgan Stanley analyst first wrote about AMD's potential graphics card sales issues two weeks ago, downgrading its rating from "equal-weight" to "underweight." He argued that while the company had gained some added profits due to the cryptocurrency mining community, this revenue would not last.
In his analysis, he wrote that "we expect cryptocurrency [mining] to gradually fade from here," noting that he expects video game consoles and graphics demands in general to decline in 2018 as well.
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AMD saw its revenue grow 19 percent due to the popularity of its latest graphics cards, according to a previous CoinDesk article. Competitor Nvidia also saw a significant revenue boost thanks to GPU buyers who are using them to mine cryptocurrencies.
GPU mining image via Shutterstock