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REVENUE FROM CRYPTO MINING GPUs.........May Fall in 2018 - Morgan Stanley

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The continuous systems upgrade undertaken by Blockchain networks like Ethereum will soon begin to rob-off on mining cost which crypto miners bear.  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.

Fireinthebone gathered that Joseph Moore is basing his prediction on a new report from Barron's and Benzinga, suggesting 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, companies such as AMD could see their mining-related sales plunge by as much as 50% next year.  Specifically, the Morgan report stated that:

"We believe that total graphics sales for ethereum mining in 2017 will be $800 million or so, and will decline by 50% in 2018; we can validate the 2017 number by looking at the increased complexity of the algorithm. Unless ethereum prices rally, downside variance to our 2018 forecast is more likely than upside."

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.

FIRE:  This report agrees with the futurist view expressed by two GPU graphics companies AMD and Nvidia in their financial reportings which we published recently.  They expect further decline in their revenue from crypto mining services.


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