Morgan Stanley: GPU mining sales will fall in 2018

Joseph Moore, analyst at Morgan Stanley published a report with a forecast for 2018: GPU manufacturers can lose up to 50% of sales revenue
15 November 2017   2470

Analyst of American banking holding Morgan Stanley Joseph Moore published a report with a forecast for 2018 on the decline in sales of video cards, which could adversely affect the financial performance of AMD and Nvidia. This is reported by CoinDesk.

Among the factors contributing to the drop in revenue from the sale of powerful videocards, the analyst pays attention to a decline in the overall block reward on the ethereum network, from 5 to 3 ETH. In general, Moore is confident that in the corresponding segment the largest manufacturers of videocards can lose up to 50% of sales revenue.

We believe that total graphics sales for ethereum mining in 2017 will be $800 [million] or so, and will decline by 50% in 2018; we can validate the 2017 number by looking at the increased complexity of the algorithm. Unless ethereum prices rally, downside variance to our 2018 forecast is more likely than upside.

Joseph Moore

Analyst, Morgan Stanley

Two weeks ago, Joseph Moore published a AMD video cards sales forecast, reducing his value from "neutral" to "negative". According to the analyst, despite the fact that the company managed to get super profit for some time due to the avalanche demand for video cards for mining, this trend is unlikely to continue in the future.

Bear Market to Hit Mining Hard

BitMEX research division presented an analysis of the impact of market decline on the mining industry
11 December 2018   119

The cryptocurrency market has experienced a marked decline over the past weeks. The BitMEX research division presented an analysis of the impact of these events on the mining industry. Bitcoin hash rate has fallen by 31% since the beginning of November, which is equivalent to the capacity of 1.3 million Bitmain S9 devices. From this, BitMEX concludes that miners as a class are in a difficult situation, however, they may have different conditions, and those who pay more for electricity, are forced to turn off their equipment first, while others may still be quite viable.

The decrease in the price of Bitcoin by 45% since the beginning of November has already caused two recalculations of the complexity of mining to the lower side - by 7.4% and 15.1% on November 16 and December 3, respectively. The first recalculation turned out to be the largest since January 2013, the second - since October 2011.

Bitcoin mining revenue fell from $ 13 million per day in early November to $ 6 million per day in early December. The fall in the size of the miner's encouragement turned out to be even more rapid than the fall in the price of cryptocurrency. This is due to the delay in recalculating the complexity of mining. For the six-day period ending December 3, 21.8% fewer blocks were mined than expected, since the miners left the network before recalculating the difficulty. As a result, in addition to reducing the size of the miners' encouragement in dollar terms, due to lower asset prices, they received 21.8% less bitcoin awards.

One of the popular reasons for the recent decline in the cryptocurrency market is that miners sold bitcoins to cover their costs of hash warsin the Bitcoin Cash network. The monitoring platform Boltzmann recorded an unusually large sale of Bitcoin by the miner on November 12, that is, 3 days before the hard fork of Bitcoin Cash.

BitMEX assumes that the actions of miners over the past weeks could have played a significant role in reducing the market, however, recommends not overestimating their value and reminds that in a bearish trend, prices continue to fall regardless of asset movements and news.