The short answer is yes, you should sell your GPU mining rigs.
We do the math on why you should sell your GPU mining rigs, check out our article called GPU Mining Profitability After Ethereum Merges to Proof of Stake. The article also contains strategies to plan for the Ethereum Merge and what to do with your GPU mining rigs. So definitely check those out.
If you’re considering reading this, it’s probably worth your time to drop 7 minutes & read the article, but here’s a quick TL;DR:
ETH mining revenue shrinking…with nothing to replace them after the merge
Ethereum switching to Proof of Stake instead of GPU Mining aka “The Merge”
If you want to read more about why GPU mining will not be profitable after the Ethereum Merge to PoS, check out our article GPU Mining Post ETH Merge. In short, the Ethereum core developers plan to abandon Proof of Work (GPU Mining) and shift to Proof of Stake (oligopoly) to produce blocks & secure the Ethereum blockchain.
Difficulty Bomb
The difficulty bomb is an artificial increase in mining difficulty that will logarithmically reduce the awards on Ethereum. The reason for the difficulty bomb is to incentivize miners to keep mining throughout the transition to proof of stake. We
EIP-1559
Alongside a block reward reduction, this Ethereum Improvement Proposal had a significant impact on mining revenue after implementation in the London hard fork, in August 2021. This change in monetary policy burnt (destroyed) some of the fees paid by users instead of giving them to miners. Now miners are mainly paid through “tips” via MEV. Although this has been the case for over a year, this still has made mining less attractive.
Bear market
The price of Ethereum’s ETH token, not to mention most assets during this period of Federal Reserve tightening, has experienced a dramatic drop below the previous cycle’s all-time high. Due to the fact that 97% of GPU mining revenue is paid out from the Ethereum network (even if you’re being paid in Bitcoin, your mining farm is still actually mining Ethereum), and the ETH token price is down, mining returns are at low levels not seen since the previous bear market in Jan 2021.
Hardware Resale Value
It’s a unique property of crypto mining that all miner’s profits move lower at the same time. In many other business models, one competitor may thrive in an adverse environment, while many others fail (1% of miners will remain profitable after the merge). This reality also produces a compounding factor – a steady decrease in hardware values. When miners shut down en masse, they sell their cards en masse, which lowers the price of cards. This trend has played out for the entirety of 2022. Reversing the downward trend would mean crypto and GPU mining interest has to be frothy. Like your cab driver shilling their favorite shitcoin frothy.