Morgan Stanley: GPU Demand Likely to Slow if Ethereum Moves to Proof-of-Stake

  • A Morgan Stanley report has claimed that if Ethereum moves to proof-of-stake, GPU demand will likely slow down.

A new report by Morgan Stanley indicates that Ethereum’s move to proof-of-stake has some side demerits. And the immediate effect is the sharp decline in mining hardware demand.

Reportedly, Ethereum developers are working on completing the Merge by September or early August. However, previous delays indicate that it might be up to early next year before the completion of the Merge. 

Morgan Stanley on PoW Industry 

The global debate about PoW legality has continued to stiffen Bitcoin and the general crypto adoption. Institutional investors who had put billions into the crypto Mining industry will directly be affected after the Merge.

Now, Morgan Stanley predicts even a harsher future market outlook for GPU manufacturers. 

The report added that there would still be less risk exposure for Nvidia despite the slow demand for GPU. Compared to 2017-2019, there has been less demand for Nvidia GPUs for crypto mining purposes. 

The report forecasts a decline in demand for the gaming GPU in Q1 2023 after Ethereum’s PoS is complete. Furthermore, the Ethereum staking program has recorded major milestones in total value locked.

However, AMD and Nvidia have claimed that they won’t be affected if such a scenario should happen. The bank explained that harsh sequential camps and fewer people working from home would cause a reduction in the demand for GPUs.

Most Ethereum miners will likely sell their GPU equipment when the merge is completed. Moreover, most of these companies that were mining other digital currencies may not make as many profits as they did by mining Ethereum.

Notably, the bank noted that there would still be scaling issues for Ethereum even after it migrates to PoS. Transaction fees would still be high while the number of transactions per second won’t increase.

On June 21, top Ethereum developer, Tim Beiko, released a timeline for the shutdown of Kiln, Ropsten, and Rinkeby. These shutdowns hint at the possible future of the Ethereum ecosystem.

The launch of the Sepolia Beacon Chain last week will also affect the wider Ethereum space and its value in the future.  

Side Notes 

The crypto market is down almost three times from its ATH recorded last year. Over the past year, regulations around the world have popped up, thereby fueling the need for alternative crypto consensus algorithms.

The staking concept has proved popular among most as it is cheaper for most investors out there.

Rebecca Davidson Verified

Rebecca is a Senior Staff Writer at BitcoinWisdom, working hard to bring you the latest breaking news in the cryptocurrency market. In the words of Elon Musk “Buy stock in several companies that make products & services that *you* believe in. Only sell if you think their products & services are trending worse. Don’t panic when the market does. This will serve you well in the long-term.”

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