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Why the Bitcoin bust could finally bring down inflated GPU prices

Getting a new graphics card has never been more difficult than in the past year. An increase in demand combined with chip shortages made the situation rather grim. While there seemed to be no end in sight, it now seems that there might be some hope for desperate PC builders looking to buy an Nvidia GeForce RTX 3080. According to Nvidia’s motherboard partner, ASRock, the sudden drop in Bitcoin prices may also affect the GPU market.

It’s no secret that graphics card prices are strongly tied to the crypto market. Considering that up to 25% of all graphics cards sold in the first quarter of 2021 went to crypto miners, the demand has been driven largely by mining. That 25% of GPU sales amounts to an astounding figure — up to 700,000 graphics cards were sold for crypto mining in just the first three months of 2021.

A cryptocurrency mining operation with rows of GPUs.
Lars Hagberg/Getty Images

There might now be some light at the end of the tunnel for regular GPU users as the cryptocurrency market grows increasingly volatile. Last month was particularly tough for crypto enthusiasts. Bitcoin, along with several other currencies, suffered a large drop in price. In the case of Bitcoin, the price dropped by tens of thousands of dollars. 

Part of the drop can be attributed to Elon Musk and his electric vehicle company Tesla. The company, famously dedicated to fighting climate change, stopped accepting payments in Bitcoin. However, there is a chance that Tesla will once again accept Bitcoin — but only when miners use clean energy, according to Musk.

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Another factor that could contribute to GPU prices coming back down to reasonable levels is China’s extended ban on crypto mining. China has been attempting to curb the crypto mining boom for a few years now, and this year’s ban is an extension of those efforts. The government directed payment processors and financial institutions in the country to stop processing transactions that involve cryptocurrencies.

It’s estimated that Chinese miners make up to 65% of the global Bitcoin mining capacity. As the Chinese government continues its crackdown on Bitcoin trading and other crypto-related activities, the demand for mining cards will naturally drop.

The RTX 3080 graphics card sitting on a table.
Image used with permission by copyright holder

According to ASRock, the demand for the latest AMD Big Navi and Nvidia Ampere cards in China has markedly declined. Despite that fact, the company reports that its graphics card sales are likely to continue growing rapidly throughout the year. Calling it rapid growth is not an exaggeration — ASRock stated that its year-over-year net profit increased by 167% in the first quarter of 2021. This makes it the most profitable quarter ever for the company.

ASRock expects that about 20% of its sales in the second quarter of 2021 will be graphics card sales. While Nvidia tries to combat supply shortages, AMD made some capacity and supply chain adjustments. As a result, ASRock expects to see an increase in AMD graphics card shipments in the second half of 2021.

Cards commonly used for mining, such as Nvidia’s GeForce RTX 3080, have been selling out in seconds and then returning to the market at outrageous prices. This also allowed brands to raise the MSRP of some cards, such as Nvidia’s recent choice to price the new RTX 3080 Ti at $1,200 from the get-go. 

The report from ASRock is the first bit of good news that PC builders have received in a long time. If this downward spiral on the cryptocurrency market continues, there is a chance that the demand for the best graphics cards will drop. That, in turn, might bring down the prices of cards and let more people get their hands on a GeForce RTX 30-series instead of waiting for the release of RTX 4000.

Monica J. White
Monica is a UK-based freelance writer and self-proclaimed geek. A firm believer in the "PC building is just like expensive…
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