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

Other price-raising strategies?

[sheramil]

So, what other essentially pointless activities can video cards perform that might raise their prices again? How about... deep learning? What's wrong with video rendering? Buy a whole bunch of them and send them to Ian Hubert so he can get the next episode of "Dynamo" out of the way more quickly.

Re:Other price-raising strategies?

[dohzer]

Just stop making as many now that demand has dropped.
Too simple?

"Price Gouging"?

[Anonymous Coward]

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.

So which one is it: price gouging, or legitimate supply and demand?

Price gouging only occurs in two cases. When prices are raised artificially regardless of how low demand may be, or (more controversially) when it's an essential human need like water and there is a disaster or other emergency. Of course in the latter case a judgment call needs to be made about whether shortages are more desirable.

Re:"Price Gouging"?

[Junta]

Well, it's also possible to induce scarcity. If it were a truly competitive market, then a competitor would have probably do a crazy production ramp up to mitigate.

As it stood, nVidia limited their production ramp up (precisely because they expected the bottom to fall out of the market and didn't want to be stuck with a glut when it fell) and instead did various things to try to throttle customers buying GPUs (although they explicitly gave crypto-mining an exemption to some of those, because they had such mixed feelings on it).

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.

Re: "Price Gouging"?

[jpaine619]

You think the commodities markets are free? Do you have any idea how much money the federal government gives out in the form of subsidies to manipulate those exact same prices?

Why the FUCK is there still a sugar subsidy?!? Something like 80% of all farms are owned by large corporations and we are still subsidizing certain products (corn/sugar/etc).

Maybe if sugar was just a little bit more expensive, under a real FREE market for sugar, we'd use a little bit less of it.

As near as I can tell, the Mexicans figured out how to properly use sugar in sweetbreads.. They put a little bit on the OUTSIDE where it hits your tongue instantly.

We, on the other hand, put it on the inside and have to use so much that bread might as well be called sugar/flour cubes.

We know too much sugar is bad for us, but lets keep the price down artificially so that we can continue to use it as a filler for everything....

There is absolutely no sector of the US Economy that has anything that even resembles a free market at the present time. I can't think of any sector that doesn't have at least one large player being given chunks of cash to manipulate the pricing, even if it's only in the form of tax breaks.

Re:"Price Gouging"?

[Solandri]

That's not price gouging though because Nvidia didn't raise the wholesale price of their GPUs. Even when retail high-end GPUs were ridiculously overpriced, it was still possible to buy a pre-built system with a high-end GPU at a reasonable price because the company building it was able to get the GPUs at uninflated wholesale prices. eBayers would buy these systems and part it out, selling the GPU separately from the rest of the system (which they resold as using integrated graphics), to take advantage of the discrepancy between the system price and component market price.

What most people don't seem to understand about market pricing is that prices for a commodity do not rise because sellers raise the price. It rises because buyers buy out all the inventory of sellers offering the item at a low price. That leaves only sellers offering it at a higher price with inventory, which buyers then perceive as an increase in market price. Sellers can then take note that the items are selling out at the lower price, and may choose to raise the price at that point (the sweet spot is when you're just barely able to keep an item in stock). But it's the buyers who cause the price increase (by depleting the market of lower-priced inventory), not the sellers.

MSRP should have gone down too!

[Mishotaki]

MSRP of the release price of a 2 year old card is not what i call a good price... we're still being gouged by the overpriced video cards that made their MSRP stay the same for so long..

Re:MSRP should have gone down too!

[Gavagai80]

The development this article is about is exactly why that doesn't happen. Nobody's going to re-purpose their factory to specialty cards for a market that can virtually disappear by the time you're ready to go to market.

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:MSRP should have gone down too!

[DigiShaman]

we're still being gouged by the overpriced video cards that made their MSRP stay the same for so long..

"Gouging" isn't the right term. There is zero collusion going on between all the GPU re-sellers (Newegg, Amazon, etc). Yes, the prices ought to be lower in a normal market. But this supply/demand market is hardly normal thanks to cryptocurrency.

Make no mistake about it; nobody wants to be holding onto inventory that devalues overtime. This is especially true in computing technology. If you haven't turned a profit on old hardware, you never will. At worst, it's actually costing you money to warehouse it. In fact, some will just take the loss and sell it below cost just to free up space for other inventory.

Yawn...

[Freischutz]

As Cryptocurrency Values Plummet, Graphics Card Pricing Improves Dramatically ....

Tulip bulb market crashes, flowerpot pricing improves dramatically ....

PoW-based public blockchains should be outlawed

[enriquevagu]

Public blockchains that rely on Proof-of-Work (PoW) should be outlawed. They encourage mining, which is basically wasting energy in HUGE amounts (in the case of cryptocurrencies, to generate virtual coins out of thin air). They are such an inefficient way of implementing the technology, in terms of energy consumption, that they should never be considered as a viable option. If you are considering blockchain-based technology, please think of the planet for a moment when architecting your solution.

Remember the Energy Star program? Well, that program should be extended to forbid certain technlogies. Such as Bitcoin.

For more info, see the Bitcoin Energy Consumption Index. Bitcoin is wasting more energy than many countries in the world. At least, now we have GPUs back to normal prices.

Re:PoW-based public blockchains should be outlawed

[religionofpeas]

Should we also outlaw video games which are also wasting energy in huge amounts ? Think of the planet, and play a board game instead.

Re:PoW-based public blockchains should be outlawed

[q4Fry]

Think of the planet, and play a board game instead.

A game made of tree pulp? I dare not. Think of the planet!

Re:PoW-based public blockchains should be outlawed

[religionofpeas]

Cryptocurrency is wasting energy for nothing, there are better ways to go than proof-of-work.

Problem solved then. If there are better ways, they will soon take over.

Video games can't be implemented any other way.

But you don't have to play them.

Re:PoW-based public blockchains should be outlawed

[lgw]

Cryptocurrency is wasting energy for nothing, there are better ways to go than proof-of-work. Video games can't be implemented any other way.

The only freedom is freedom for me to do things you find useless or harmful. Would you prefer the communist ideal where each of us work each day to the limit of our abilities to meet the needs of others?

Re:PoW-based public blockchains should be outlawed

[DontBeAMoran]

Video games can't be implemented any other way.

Sure they can. Nobody needs 4K videogames running at 120FPS. We could all return to 2010-era 3D graphics and developers would be forced to make fun and entertaining games instead of the sugar-coated-visuals crapfest they're making now.

If that still requires too much energy, how about going back to SNES-era graphics? Still too much? How about Intellivision-era graphics? It's still videogames.

Can you imagine how low power a 2018 Intellivision system could be? It would probably run on a CR2032 battery for over a month.

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:Over-production

[CanEHdian]

The whole point is that, before all the mining craziness, the MSRP was about that maximum price (a few exceptions like "Golden Sample" super-overclock cards) you'd see. The so-called "street price" was under MSRP and as soon as the next iteration of cards hit the market, the previous generation went for well under MSRP. 2-year old cards went for clearance prices.

Re:Over-production

[Anubis IV]

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.

Great points all around, but I wanted to draw special attention to this statement of yours in particular. The summary is suggesting that Nvidia’s next cards are coming soon, but Nvidia’s President said last month at Computex that we won’t see the new cards for “a long time”. People reading the tea leaves are expecting an announcement or leaks to start in earnest next month, but with word straight from the horse’s mouth and rumors about them having far too much inventory seeming to bear out, we have no good reason to expect new cards to be released anytime soon. At best, we may see something, but we shouldn’t expect to have it in ours hands anytime soon.

Is it really a currency?

[baenpb]

Every article regarding cryptocurrency (this one included) refers to the product as a "currency," but it seems like that use case has been abandoned. It is strictly an investment commodity, like oil futures. Bitcoin was popularized with the internet black markets, with purchasing drugs and prostitutes. Is that still happening? Years back I started seeing posts about graphic designers who would accept payment in bitcoin. Weeks ago I saw that there were cryptocurrency machines set up in Schiphol airport, where you can convert euros to bitcoins. Discussions now are about which coin to invest in. There is little interest in buying coffee or lambos, just interest in how to maximize my (real-world, real-currency) money.

Cryptocurrency

[DaMattster]

The whole thing is a mania. There are a few people that got wealthy and the rest will be caught holding the bad as it plummets.

Happens all the time

[sjbe]

So which one is it: price gouging, or legitimate supply and demand?

Those are not mutually exclusive. You can have situations where normal market dynamics of supply and demand allow for price gouging. Happens all the time in medicine. It also would happen in certain other industries like utilities where there is a monopoly if the vendors weren't regulated. While you can certainly argue that drug prices are a function of legitimate supply and demand, the fact is that price gouging routinely occurs as well because they are taking advantage of people who have a weak BATNA. Any time you need (not want but actually need) something and there is a bottleneck on supply controlled by someone else there is a strong chance of price gouging occurring. Particularly when discriminatory pricing is not prohibited.

Re:Happens all the time

[lgw]

"Price gouging" just means "a price I don't like", so it can happen in any kind of market.

Elsewhere...

[Voice of satan]

I still read the French speaking internet and this is what i see there: People are selling theirs rigs at stupidly high prices. I see personal ads in forums and second hand sale websites. I do not see any sign of anyone buying them. And they sell their whole rigs, not the individual GPU's mind you.

Even at half the price, i wouldn't buy the cards. They have mined 24 hours a day for months or worse. Their lifespan must be well reduced.

Thinking of the high prices of electricity there, i wonder how many of them mined for a loss hoping the cryptos would skyrocket.

In a gold rush the ones getting rich are the ones selling pickaxes...

Re:Elsewhere...

[mysidia]

Bitcoin mining does not work that way at all. You do not find or fail to find 1 Bitcoin.
Even if you were working alone for entitlement to 100% of the reward which nobody does; the block
reward has never been 1 Bitcoin.

Miners work in Stratum Pools, and receive proceeds through pay-per-share, pay for last N shares, or
another proportional method. Statistically speaking, every proper pool DOES find multiple blocks.
There is variability in how long it will be, and how many work shares are completed before a block is found,
so this assertion is false:
If you manage to find one bitcoin, then you win and it will be enough to pay for your entire rig and more. But there's also a chance you won't find anything

Because ALL the recognized pools find many blocks at a certain rate.

The basic mining process and rewards are coordinated like this:

You setup an account with your pool with a username and an address for payouts

Your pool communicates with your miner over the stratum protocol; your miner establishes a connection using your specified credentials and the pool address, and the pool server supplies your miner part of the block to be solved and your share of the search space.

Your miner works on its share of work, and at certain intervals delivers a response proving that it has completed a
certain amount of work.
            Eventually one of the working miners working on your pool finds a block which contains a block reward;
However, the lucky miner is finding a block for the POOL, not themself ---- The contents the block had regarding payout was defined by the server, which the miner has no ability to control or change, so there is in general no extra compensation for being the lucky miner that found the block.
The proceeds of the block are paid out in different proportions to MULTIPLE miners owed a share of a block reward for working the pool with
excess and the pool fee paid to a Pool reserve address for further distributions of shares owed to miners, and finally
to the pool operator.

In this manner: With bitcoin, it's typically either "win" or "lose." is FALSE.
Every worker gets paid in relation to the amount of work they contribute to the pool ---- and it's not a huge amount per block to any one operator, certainly not a whole BTC, unless you have a MASSIVE amount of hashing power on the order of many hundreds thousands TH/s available.

Re:On overreaction.

[DRJlaw]

I'm saying BTC isn't really down on any timescale that counts.

It's odd how timescales of up to 6 months suddenly don't count, and BTC speculators have suddenly become buy-and-hold investors praising Saint Warren Buffett. It's especially odd considering BTC is touted as a currency, and thus should have a relatively stable value.

2018 counts, oh great pumper of snake oil. It counts bigly.

Price-Tracking Data - PCPartPicker

[eepok]

https://pcpartpicker.com/trend...

That's what I'm watching to track prices. It doesn't look like anything has gone down to pre-July 2017 prices. It's better now, but not appropriate.

Re:On overreaction.

[Anubis IV]

1 BTC = $6,574.50 USD right now
1 BTC = $6,199.80 USD one week ago
1 BTC = $7,717.00 USD one month ago
1 BTC = $16,041.00 USD six months ago
1 BTC = $2,649.60 USD one year ago

So, yes, you're correct about the prices, but so is the summary. Prices are far down from where they were before, but they're also up from where they were before, depending on how far back you look. Even so, it's the recent downturn that is having an immediate effect on reducing prices in the GPU market, just as the upward swing had an effect on the market a few months back. Moreover, the summary doesn't seem to exaggerate anything. They even explicitly acknowledged that this recent downturn does not necessarily indicate any sort of cryptocurrency bubble bursting.

Now if only DDR4 prices could come down

[yorgasor]

The real killer is DDR4 memory. I can't put together a decent ESXi server without a ton of memory. To build my latest server, I had to pick Xeons that still used DDR3 memory, since I could get that at a fair price.

Refuse to play

[DarthVain]

I refuse to play that game. Video cards have been ridiculous for awhile now. Even with this dip, it is hardly reasonable. This reminds me of the HD (hard drive) scandal years ago. There was that flood, that jacked prices up. Then prices stayed up for a couple years beyond the flood as the highly consolidated HD market decided to artificially keep it that way for fun and profit. Sound familiar? There is basically two companies, AMD and nVidia, and a bunch of re-brands. Screw that.

I mean I got an MSI Radeon HD 7850 2GB that came with two free games (which admittedly I never really played) in 2013 (so 5 years ago!) for 190$. Not only cannot I not buy a card that good for 190 bucks now, but I would pay more now and get a card with less performance. After 5 years of technological advancement...

On top of that it had a 40$ MIR (Mail In Rebate), so it really cost me 150$... (though as per usually I think it took months to actually get the MIR).

Anyway it's brutal and I refuse to play these stupid corporate games. If they want to start selling video cards again at reasonable prices then sure, I just wouldn't hold my breath anytime soon as no doubt they will milk this for all it is worth. I just hope my 'ol 7850 is up the the task of Fallout 76 when it comes available...

Re:Supply and demand

[Raenex]

Of course medicine is subject to normal market dynamics just like any other industry. The laws of economics are not suspended just for medicine. It tends to be regulated precisely because of the ease with which price gouging can (and does) occur but supply and demand still applies to medicine. This very fact is why those who argue against government involvement in health care are so very wrong. Normal market dynamics work but they often function in a way contrary to the benefit of society and individuals.

You've got it backwards. The reason there's such a high price for medicine is because of the government-granted monopolies on drug patents. It's debatable whether the cost of patents are outweighed by the benefits of patent-seeking research.