Update, 2/16/18, 1:30pm PT: The price of Ethereum has fluctuated wildly since we published our original article; meanwhile, the price of GPUs has done the same. We've updated this article substantially from the original to reflect current market trends.
The 2017 GPU shortage, which we had previously referred to as quite possibly the worst GPU shortage in history, was a rather dark time for gamers and PC enthusiasts. The price of some mid-range and high-end GPUs doubled, and for more than a month it was nearly impossible to find an Nvidia GeForce GTX 1070 or an AMD Radeon RX 580. As bad as that shortage was, in light of the new prevailing shortage, we must now expurgate our original statement. If the GPU shortage observed last summer was horrible, the current shortage is nothing short of a complete fiasco.
The Price Of Ethereum And Bitcoin
Just like last summer, cryptocurrency mining is the fundamental cause of the current shortage. The price of Ethereum, one of the most popular cryptocurrencies, peaked at around $400 in June before dwindling down to roughly $150 on July 16. It continued to fluctuate wildly until November, when it began to rapidly increase in value one again. Ethereum hit its record high of $1,389 on January 15 before plummeting $400 to its current value of $938 as of February 16. Although this momentary decline might give the impression that the rush to mine Ethereum is once again dissipating, it is far too soon to say for sure.
Bitcoin has also recently upsurged. It peaked at roughly $18,737 on December 18. It has since fallen to $10,108 and continues to fluctuate rapidly.
The Price Of Gaming (Or Mining)
The sudden increase in cryptocurrency mining has pushed the price of graphics cards through the roof. Popular favorites of cryptocurrency miners such as Nvidia’s GTX 1060 and 1070 graphics cards, as well as AMD’s RX 570 and 580 GPUs, have all doubled if not tripled in price--and that’s just when you can actually find them in stock at all. While researching prices for this article, we observed some of these graphics cards being sold in excess of $1,000. A few GTX 1070s have even managed to hit $1,300.
While the price on essentially all graphics cards has increased, most remain in stock. This contrasts with last year’s shortage, which saw some GPUs stay out of stock for weeks. The continued availability of popular models is likely due to the steeper price and better management of GPU inventories by retailers and OEMs.
Unlike the shortage last summer, which had little effect on the low-end and ultra-high-end cards, the current shortage is affecting all segments of the market. Low-end cards have not doubled in price, but none of them appear to be available at their rated MSRP. Low-end cards remain in stock for the most part, however, so they may be all you can get if you really need a new graphics card.
At the high end of the market, AMD’s Vega GPUs have been strongly affected, shooting up significantly more than their Nvidia counterparts. If you want to buy a Vega 56 GPU, plan to spend about $1,000 for something that is supposed to be $400. Nvidia’s GTX 1080s and GTX 1080 Tis have seen their prices increase by a few hundred dollars as well, but the price difference is less substantial than most other cards. Only ultra-low-end GPUs like the RX 550 and GT 1030 have been less affected than the GTX 1080 and GTX 1080 Ti at this time.
Gamers looking for affordable alternatives to buying one of these overpriced graphics cards should carefully consider AMD’s new Ryzen 5 2400G, if it meets your needs for a low-end gaming PC. You could also consider a GPU bundle to help reduce the price of your overall system, or look into one of these other methods of acquiring a gaming GPU.
Although the scramble to buy GPUs and mine cryptocurrency is predominantly responsible for the current shortage, a cryptocurrency recession is unlikely to invoke a return to normality in the GPU market. As we reported last year, GPU cores are typically ordered months in advance by OEM board partners from AMD and Nvidia, who in turn must order them months in advance from fabs. These fabs are unable to quickly shift production to respond to changes in the market, as they have a limited production capacity and orders from other customers that are also placed months in advance that must be filled.
Taken together, this information points to the shortage continuing for a few months, at the very least, while companies rebuild their stocks.
What’s The Answer To Cryptocurrency Mining?
With the second large-scale GPU shortage in less than a year, we’re forced to question what can be done to prevent this from occurring again. We previously discussed the idea of companies increasing production to meet demand, but due to the unpredictable nature of cryptocurrency mining, a significant boost in production could be potentially harmful to OEMs. We’ll likely see a new wave of mining-oriented hardware, just like we saw last year, but will that be enough to ease the strain on the GPU market? Keep watching here for more updates as the situation evolves.
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