Bitmain has launched a mining rig designed for Ethereum (ETH). According to Bitmain the Ethereum mining rig will be ready for shipping in the second half of the year at a price of $800 per unit. Analysts are now worried that demand for graphics cards made by Nvidia and AMD will be hurt.
Miners of virtual currencies use graphics cards that are based on the chips made by Nvidia and AMD to produce new digital coins which can then be exchanged into fiat currencies or held for speculative purposes. Per data obtained from Coinbase Ethereum has appreciated by over 800% in the course of the last 12 months.
Bitmain dominates the Bitcoin (BTC) mining sector with its ASIC chips which are specialized for the purpose and are considered more efficient when compared to graphic chips made by Nvidia and AMD. Some analysts have claimed that Bitmain?s profits last year were on par with those made by Nvidia. It is understood that most of the revenue that Bitmain generated was from the sales of mining rigs.
After dominating the Bitcoin mining sector Bitmain now looks set to do the same to the mining market of Ethereum raising concerns on Wall Street. Last month Wall Street firm Susquehanna lowered the price target for the stock of AMD as it downgraded the shares from neutral to negative. This was based on the impending competition that will be presented by Bitmain as well as other firms that make crypto mining rigs.
“While Bitmain is likely to be the largest ASIC vendor (currently 70-80% of Bitcoin mining ASICs) and the first to market with this product, we have learned of at least three other companies working on Ethereum ASICs, all at various stages of development,” Christopher Rolland, an analyst, wrote in a client note.
According to Rolland the specialized chip made by Bitmain with the sole purpose of mining Ethereum will hurt demand for graphics cards. Per Rolland?s estimates about 20% of the sales AMD generated in the most recent reported period were Ethereum mining-related while for Nvidia it was 10%.
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