It is now ‘more cost-effective to turn off the mining rig and buy Ethereum’

In case you haven’t noticed, all is not well in the land of cryptocurrencies. Bitcoin is the lowest in two years (opens in new tab), and continues to fall. Coinbase CEO warned of a crypto winter and laid off 1,100 employees (opens in new tab). The latest news is that the days of profitable Ethereum mining with GPUs may also be behind us now, depending on where you live and how much you pay for electricity.

Cryptoslate (opens in new tab) highlighted the fact that the falling price of Ethereum, combined with rising energy prices, has made it useless to mine the cryptocurrency for the first time since 2020. Basically, you will simply not make money from the current price of Ethereum in most states USA given the price of electricity.

To prove the point, they use an overclock Nvidia GeForce RTX 3090 (opens in new tab) capable of generating 130 MH/s which will net you something like 0.001625 ETH per day. At the time of writing this article (this will be yesterday), Ethereum was at $1,250, which equated to $2.03. Today, Ethereum has dropped to $1,108, so you are looking at just $1.80.

“At this point, it becomes more cost-effective to shut down the mining rig and buy the Ethereum spot using the money that would otherwise be used for electricity.”

Will we see miners moving away from Ethereum? Probably not right away as many miners are into it for the long term, but if the price drop continues we expect to see the Ethereum network hash rate (opens in new tab) start to drop even further. It is currently at the same level as March, although this still represents a sharp drop from its recent high in May.

Of course, this mostly affects small-scale miners, not large mining farms that have commercial or industrial energy businesses. Still, the general message that your money is better spent just buying coins rather than trying to mine them is music to our silicon-hungry ears.

This “cryptographic winter” can be perfectly timed for the release of the latest generation AMD and Nvidia cards; unless they’re really good at mining, of course. Or it results in a glut of second-hand GPUs on the market, leaving a lot of current-gen stock unsold on the shelves, and new cards being delayed. Boo.

Leave a Comment