After rallying for the past couple of weeks, the price of Ethereum has plunged and sent the profitability of the cryptocurrency favored by GPU miners down with it. Despite the drop, Ethereum remains a highly profitable crypto to hold onto and continue to mine.
Ether’s price extended its recovery wave above the critical $1,600 resistance level today and even managed to break the $1,625 resistance level. Before starting a downside correction, it traded a new monthly high of nearly $1,655.
The cryptocurrency is currently correcting below $1,600 and approaching the 100 hourly simple moving average. However, its value is still down from its February highs of over $2,000—a significant peak in the crypto’s value.
Mining Ethereum Looks Promising
The Ethereum price drop has had a more significant effect on the coin’s viability and value; occurring due to a rise in difficulty caused by an arbitrary cap on hash generation.Between February 23 and March 3, Ethereum mining’s profitability halved, despite being on the rise slightly (via BitInfoCharts).
And if all of the value is stripped away in a matter of days, there is still money to be made. Profitability, like the value of Ether, is steadily increasing once more.
As long as the blockchain is maintained, Ether miners continue to profit from the high fees and transaction rate. However, the slow transition to ETH2 featuring a new PoS ecosystem might mark the end of Ethereum’s mining once the Beacon Chain merges with the mainnet.
The aim is to make the blockchain more scalable, safe, and sustainable by moving further from the current PoW protocol, which Ethereum currently operates. It would, however, put an end to what has become a lucrative business for Ethereum miners. While the complete switch to Eth2 is still a long way off, Salter believes that as Eth2 develops, miners can carefully consider how to boost their operations.
Ethereum Price and GPU Mining Activity
Following cryptocurrencies’ high volatile nature, it is hard to determine where Ether will end up a year from now. For now, though, it’s still profitable enough to keep GPUs in high demand.
The continued growth in cryptocurrency prices has seen the return GPU mining activity in 2021 and further reduced graphics cards.
Nvidia recently announced that they are trying to make the RTX 3060 desktop graphics card easier for gamers, not miners. It did this by implementing GPU driver software that reduces Ethereum’s farming capability by half to prevent miners from mining.
Interestingly, Nvidia said that cryptocurrency-related sales are a small fraction of total revenue in an investment phone call. That’s just $ 300 million out of $ 5 billion, which shows that miners have no role in GPU shortages.
