Cryptocurrency Mining Imports and Tariff Activities to be Affected by USA and China Trade Wars
Cryptocurrency Mining Activities to be Affected by Trade Wars Between China and USA
U.S. President Donald Trump has decided to impose different tariffs on Chinese goods. This is not only having a deep effect on the world economy, but it is also affecting cryptocurrency mining activities.
The cryptocurrency market has been in a bear trend during the last year. This is something that has strongly affected the mining industry. An increase in the price of the products used by mining companies could severely damage their profitability. The latest tariffs on Chinese goods could lead to an increase in the price of graphics cards from AMD and NVIDIA.
The information has been released by CNBC on September 27 informing that graphics cards built in the Asian country could have a price increase in the near future. The United States has imposed 25% tariffs on goods produced in China.
AMD and NVIDIA are two of the most important chip suppliers for the gaming market and have also an important share of the crypto mining market as well. The tariffs will be applying to graphics cards that are sold individually rather than those used on prebuilt PC systems.
Shrout Reserach’s Ryan Shrout explained that this is an important problem since most of the graphics cards are made in China.
About it he mentioned:
“PC gamers will likely see increased prices on graphics cards with the implementation of this tariff, an unfortunate side effect of the continued policies of the Trump administration. This is unfortunate timing for NVIDIA as it was already under pressure for the prices of its new RTX product family, and it is unlikely that it or its partners will simply absorb the added cost of the tariff.”
Bank of America Merril Lynch informed that Trump tariffs could raise the price for the company’s new RTX cards between 5 and 10 per cent in the next months. Shorut explained that some graphics card manufacturers could move to Taiwan and avoid tariffs imposed by the US.
AMD released a statement in which the company explains that they are working closely with customers and partners to mitigate the potential impact related to tariffs on AMD-based products. However, they have also said that they do not expect US tariffs to have a material impact on our business.
Moreover, an NVIDIA spokesperson said that some of its partners are moving the production to other countries with the intention to avoid further problems. Nonetheless, Nvidia explained that the impact would be relatively little.
“There’s relatively little direct impact on us. We understand that most of our partners have moved or are moving their impacted assembly work to Taiwan and Mexico, which aren’t affected by the tariffs.”
Older models of graphics card could surge again in the market if prices increase for both NVIDIA and AMD. Another thing that can happen is that miners could choose ASIC miners rather than GPU miners, something that would be very positive for the ASIC mining industry.
Another possibility is that investors would invest in cryptocurrencies rather than in building mining rigs. This could eventually generate a buying pressure on prices and help virtual currencies recover from this bear market.