End-2017 Crypto Boom Drives GPU Prices Skyward

Soaring demand for graphics cards by crypto miners results in supply shortage that is infuriating gamers

by Viko
12 February • 1.5 min
In Mining

The pre-Christmas surge in the value of Bitcoin and other cryptocurrencies has led to a sizeable increase in the prices of GPUs (graphics processing units) due to a spike in demand for this type of hardware that is needed to mine digital coins.

Supply of graphics cards, originally used by dedicated gamers, has been depleting, as more and more crypto enthusiasts have started buying them to be able to verify cryptocurrency transactions in return for a reward. GPU prices have tripled in a couple of months, but miners claim such an investment could be paid off in about a month.

That’s not the case with gamers, who need the graphics cards to boost their frame rates. And GPUs are not only quite expensive but also unavailable to find, as the key suppliers – Nvidia and AMD – have problems catching up with demand.

Last week, Nvidia’s CFO Colette Kress admitted that the strong crypto demand exceeded the company’s expectations https://www.reuters.com/article/us-nvidia-results/nvidias-upbeat-forecast-powered-by-data-center-cryptocurrency-demand-idUSKBN1FS39T, with inventory levels of its gaming GPUs throughout the fourth quarter of 2017 staying lower than historical channel inventory levels. Kress noted, as quoted by Reuters, that the overall contribution of cryptocurrency to the company’s revenue is difficult to calculate, but it should have increased as compared to the preceding quarter.

One of the things gamers are hoping for is a continuous slowdown in crypto markets that would, in turn, reduce GPU demand.