In brief:
Wall Street firm Susquehanna has claimed that cryptocurrency mining hardware manufacturer Bitmain, has begun producing Ethereum ASIC miners. Following this, the price targets for leading GPU makers AMD and Nvidia are being reduced.

A Wall Street analyst recently claimed that Bitmain has developed an ASIC to mine Ethereum. Consequently, so as to compete with the mining hardware giant, the Wall Street firm Susquehanna has reduced its price targets for top GPU makers AMD and Nvidia. Moreover, the analyst Christopher Rolland has asserted that three other manufacturers had also started developing Ethereum ASIC miners.

China-based hardware manufacturer, Bitmain is known as a market leader in producing Application Specific Integrated Circuit (ASIC) chips. Susquehanna analyst Christopher Rolland, on Monday, informed customers that Bitmain from the second quarter of 2018 will start shipping the first miners compatible with Ethash, the Proof-of-Work (PoW) hashing algorithm used by Ethereum and some other cryptocurrencies.

Rolland wrote, “During our travels through Asia last week, we confirmed that Bitmain has already developed an ASIC for mining Ethereum and is readying the supply chain for shipments in 2nd quarter of ‘18. 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,” reported CNBC.

It is to be noted that to condense competition from cryptocurrency mining company Bitmain, Susquehanna has reduced its price target for AMD shares to USD $7.50 from USD $13 and Nvidia shares to USD $200 from USD $215.

So far, the general-purpose GPU chips usually found in gaming computers were used for mining Ethereum and other alike cryptocurrencies. The application-specific ASIC chips will now maximize the efficiency of cryptocurrency mining.

Both companies, Nvidia and AMD enjoys leading positions in the GPU manufacturing market and are often treated as “proxy stocks” for the cryptocurrency industry. In 2017, when cryptocurrency prices skyrocketed, these two companies reaped high profits.

ASICs will hurt the demand for GPU chips and even AMD in its recently-published annual filing cautioned that in case miners stopped buying, the demand of GPU could be “materially adversely affected“.

However, the mining-related demand for GPUs will not completely shrink with the development of Ethereum ASIC miner as it will be used to mine other cryptocurrencies. In order to maintain ASIC-resistance, Monero, for example, has assured to keep on modifying its mining algorithm.


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