GPU prices are dropping and have been for months. A new report from Bloomberg shows just how quickly they’re crashing, saying prices have fallen by 50% as the market deals with the crypto crash.
The report makes a strong argument for GPU prices falling with the price of Ethereum, a trend in crypto falls we wrote about in June. According to the data, the average price of an RTX 3080 on the second-hand market has decreased by almost 50% since the end of April.
This is a serious reality check as the GPU shortage ends. While many factors contribute to the GPU shortage, the main driver is demand from cryptocurrency miners. In the first half of 2021, for example, a quarter of all GPU sales went to cryptocurrency miners. According to some estimates, miners have spent $15 billion on GPUs for Ethereum mining.
The cryptocurrency boom boosted the value of Nvidia and AMD last year. Nvidia, in particular, saw 50% growth in revenue each of the past two years, with the company reporting that less than 1% of its gaming-related sales came from the company’s mining-focused GPUs. Nvidia added a limit to its gaming graphics cards to discourage mining, but hackers were able to bypass the limit entirely in May.
If you think crypto’s impact on the price of GPUs is impossible to tell, you’re not alone. In May, the US Securities and Exchange Commission (SEC) fined Nvidia $5.5 million for not disclosing the impact of cryptocurrency on its revenue over the past several years.
The rapid drop in prices comes as nearly $800 billion worth of crypto has disappeared from the market. Before that point, GPU prices began to approach MSRP. Now, you can find many excellent graphics cards, brand new, for sale below list price.
It’s an interesting time for graphics cards, as they’re getting cheaper, but Nvidia and AMD are gearing up to release new generations. Nvidia is working on its RTX 40-series graphics cards and AMD on its RX 7000 GPUs, and we expect to see both before the end of the year.
We may see prices bounce back if there is demand from cryptocurrency miners. On the other hand, we could see a repeat of the crypto crash of early 2018. Just like in 2020, crypto boomed in late 2017 and caused a GPU shortage. After prices returned to normal, Nvidia and AMD were stuck in a tough spot with palettes of GPUs that were in low demand.
We’ll likely see a repeat of that later this year, hopefully giving gamers a break from hunting for high-priced graphics cards. Regardless, make sure to bookmark our roundup of the best GPU deals to see where the market is headed.