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.
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.
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
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.