Just another reminder that (I've said this numerous times before, not sure if I said it here) Ethereum merge is like 95% (that's a conservative estimate) happening on time. The testnet has been going well and the dev team has already started warning GPU miners to be ready because they won't get block rewards after the merge is complete.
The reason Nvidia started sharply dropping prices is because they're aware that the used GPU market is about to be flooded and they don't want to get thousands of GPU's returned to them when they can't sell them in the summer.
Nvidia knows this stuff months in advance. A lot of "large scale" miners buy GPU's in bulk directly from AIB partners. The buying started drying up which meant that surplus GPU's could go to system integrators and retailers. System integrators haven't been able to sell PC's even with GPU's priced at MSRP for a month or two now, which means now retailers have surplus. So Nvidia slashed prices across the board because they had been sandbagging us, using the pandemic and chip shortage as an excuse for higher prices and everyone bought it (I didn't, I knew what they were doing).
These prices are "not that bad", but this is your warning: If you buy a 3080 based card for $1100 or $1200 now, don't say you didn't get warned when prices come down even harder in a month or two. Miners have been in denial that the merge is happening, but once reality sets in, they'll start dumping their hardware. And I don't think you can easily comprehend the thousands of GPU's (probably hundreds of thousands) that have been purchased for crypto mining. I'm holding out for a $600 3080 and I feel very confident I'll get it.
In before "miners will just mine a different coin"
No they won't.
Short answer: no profitability.
Long answer:
The hashing power with current GPU's in circulation is 100,000x or more higher than what would be needed for alt coins to be profitable. As more GPU's mine a coin, the coin gets harder and harder to receive rewards for. Ethereum has worked its way up to its current value over the course of nearly a decade. If even 5% of the GPU's out now moved to alternative coins, their difficulty would spike and block rewards would dry up. You'd be making pennies per week with free electricity and lose dollars a day if you pay for electricity.
This is different from the 2018 and 2014 GPU price crash. Those crashes were related to crypto value dropping. This is literally going to be the "main" profitable POW crypto that's been the primary source of GPU mining profitability for almost a decade suddenly not being POW at all. This has never happened before. Even when BTC moved to ASIC's, it was still POW.
I can't even predict how bad GPU prices are going to drop... My gut feeling says that even 50% might not be as big of a drop that we'll see. Just look at Reddit's GPU mining community or YouTube videos on GPU mining setups to get an idea of the kind of hardware people are running, and then tell yourself, that's only Reddit and YouTube.