The virtual currency craze is still heating up, with a surge in GPU sales driven by mining activities. Foreign investors have raised concerns that the high profits from cryptocurrency are leading to "false demand" for graphics cards. In the long run, major GPU manufacturers like Nvidia and AMD may face significant risks due to this trend.
According to Barron's The Street, many Ethereum miners rely on GPU-based mining to boost their computational power. Analyst Christopher Rolland from Susquehanna noted that the demand for GPUs from mining operations has exceeded expectations for both Nvidia and AMD. He warned that the current surge could create long-term vulnerabilities for these companies. Many consumers buy GPUs for gaming, but only use them for about 5% of the time—most of the rest is dedicated to cryptocurrency mining.
Rolland believes that the lucrative mining rewards are creating artificial demand, which poses a risk for both companies. If Ethereum’s price drops, the demand for GPUs could fall sharply, affecting sales. As a result, he recently lowered his target price for AMD from $15 to $13, signaling potential downside if the crypto market cools down.
In 2017, the Ethereum network saw a massive increase in GPU usage. According to reports, the number of GPUs used in the Ethereum network rose by 2.4 million units in Q3, valued at around $300 million, and reached $500 million by the end of the year. This growing reliance on GPUs has made a significant portion of revenue for both Nvidia and AMD, and its importance is increasing.
Rolland also pointed out that current GPU prices are 40–70% above the official retail price, suggesting strong buying momentum this season. However, analysts warn that miners might eventually shift toward software-based solutions, reducing their dependence on hardware. This could lead to lower demand for graphics chips in the coming years.
MarketWatch and Business Insider reported that Mizuho analyst Vijay Rakesh released a research note on November 27, 2017, highlighting the complexity of cryptocurrency mining. He noted that many miners are moving away from GPU-based setups and exploring alternatives such as pool mining, cloud mining, or using application-specific integrated circuits (ASICs) for more efficient operations.
Given these developments, Rakesh believes that while Bitcoin and Ethereum may continue to attract attention, the recent stock price increases for Nvidia and AMD are likely to be short-lived. The growth driven by cryptocurrency mining may not last into 2018, and investors should remain cautious.
On-Grid Solar System
The On-grid system is connected with utility grid and this system would work only if the grid is available. In case of a power cut, the system will not work and hence the On-grid system is also termed as a Grid-tied system. Grid is required since the inverter needs to be provided a reference voltage and the inverter needs to sync with the grid in order to export energy back into the grid.
On grid systems make sense for locations with no daytime power cut or with less than 2 hrs of daytime power cut. This type of system is apt for reducing your electricity bills since it is cheaper than a Battery based system and there is no recurring cost of replacement of panels.
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