As Cryptocurrency Values Plummet, Graphics Card Pricing Improves Dramatically (hothardware.com)

MojoKid writes: In recent months, the cryptocurrency industry has taken a sharp downturn in valuations of virtually all major currencies, from Bitcoin to Ethereum. As a result, cryptocurrency mining itself has become significantly less lucrative for the average miner. In addition, demand on GPUs from the major OEM suppliers like NVIDIA and AMD, has fallen off dramatically as well. Cryptocurrency miner demand for graphics cards has fallen so much so, that pricing of board partner brands like EVGA, Asus, MSI, Gigabyte and others, has returned basically to MSRP levels. This is compared to the sharp price gouging that was going on earlier in 2018 and late last year, when demand was far out-stripping supply. In fact, reports are emerging now that another approximate 20 percent price drop could be coming to GPUs this month, especially as NVIDIA is expected to launch its next generation gaming graphics card very soon. Whether or not this is indicative of some sort of cryptocurrency bubble burst remains to be seen. However, for now, gamers and PC enthusiasts are likely breathing a sigh of relief, as better supply/demand dynamics are clearly in sight.

Comments

Over-production

[The Cynical Critic]

I've personally been following GPU prices pretty closely for the last year or so and from what I've seen the drop-off hasn't even been that dramatic since the start of the year and there's still plenty of air in prices, particularly for AMD cards. You can find plenty of Nvidia cards for about MSRP, thou that's not all that unusual as there's been the occasional MSRP special trough the whole craze, but AMD cards still go for well above MSRP almost all across their range and there's actually a reason for that.

The last time there was a mining craze and then a bubble burst AMD, who like this time had the hardware best suited for this, and their board partners ended up badly over-producing and when the bubble burst almost over night finding themselves with a significant stockpile of unsold hardware. Not only that, a lot of miners also either intentionally broke their cards by wrapping them up so that they'd fail out of heat so they could return them for a refund or then flooded the second hand market with their cards, significantly reducing the demand for that surplus hardware and AMD and their partners needed to shift. The end result of this was that there was suddenly a huge amount of second hand top-end 200-series cards and really big discounts on new cards, which as you may be able to guess didn't exactly do wonders for their bottom line.

What seems to have happened this time as that AMD and their board partners were cautious and deliberately under-produced during the craze and now that things have died down they don't have the surplus stock Nvidia has. Nvidia has reportedly even had to resort to delaying the launch of their next generation of cards just so that they can shift their existing inventory without having to resort to fire sale prices.

Re:MSRP should have gone down too!

[cre1mer]

The Gigabyte 1050 Ti 4GB that I paid $100 on sale at NewEgg peaked at $200 and currently list for $180. Not much of an improvement.

Re: "Price Gouging"?

[lgw]

That depends what you mean by "free market". You could choose some unrealistically idealized definition, just so you can complain that it's unrealistically idealized, if you were a fool.

By any reasonably definition, the US commodities markets are free markets. The government does not set prices, not choose who's allowed to participate. Most of the market rules are set by the market itself, not the government.

The only thing we can do is create a very good model of a free market by setting up rules and limits to its scope

That's exactly what most people would call a "free market", of course. You need rules to prevent fraud and enforce contracts, but that in no way makes it less of a free market. Prices are still set by supply and demand.