Why Graphics Card prices are too damn high!

TLDR: The cryptocurrency price hike is the reason for the current graphics card price inflation.

Today I learned why graphics card prices are so high.

Currently, it is near impossible to buy a reasonably priced graphics card. Turns out the graphics card scarcity caused by the price hike of cryptocurrency. So, I took the smart path in this situation and sold my RX-480 for $130 profit the other day.

What is happening?

This chart shows price history of RX480 from camelcamelcamel.com. Notice the green line shows that Amazon has been out of stock for this graphics card since April 7th. 3rd party prices tripled since then.

So why??

This chart shows USD value of Ethereum. Value has jumped by 7X since April.

This chart shows value of Bitcoin. Value jumped by 2.5X since April.

One RX 480 card equals to $107 per month for Ethereum after deducting electric costs. You can clearly see why miners are after Graphics cards. You get a return on your investment in about 56 days if you had purchased your RX480card for $200.

Why now?

In addition to price of coins going high these are the reasons for the demand and price incase-

• Bitcoin is the predominant cryptocurrency currency. From a miner prospective Ethereum is the most profitable because of the speed and overhead cost of mining. Ethereum miners preferred AMD over NVIDA. Thus, the sudden demand increase of AMD GPU.
• AMD’s RX 480 card seems to be the most efficient card on Ethereum mining. Yet, AMD hasn’t supplied enough to combat this. AMD seems to be putting all their resources on producing VEGA and RX-580.
• AMD also has a raw material bottleneck that’s keeping them from producing chips at the highest rate. Mineral mining industry growth is going down which produces the core ingredients of silicon wafers. Suppliers aren’t prepared to combat the sudden increase of the demand.
• Japan legalized the cryptocurrency as payment method, Russia is moving to legitimizing cryptocurrency, thus the price hike resulting in GPU demand.
• Code change that underpinned litecoin.

What’s next?

• AMD and NVIDIA each has their own crypto mining card on production. When AMD and NVIDIA’s card starts to sell, demand on gaming gpu should go down.
• Ethereum will eventually switch from proof of work (mining) to the proof of stake (possession of currency) system. Which will mean less demands for GPU card.
• AMD is releasing VEGA GPU, which predicted to be 2X more efficient at mining Ethereum vs RX 480. So demand for inferior GPU should be on the decline side after the release.

Resources for GPU purchase:

• https://www.nowinstock.net/computers/videocards/ Shows price and stock of various video cards
• https://www.reddit.com/r/buildapcsales/ Reddit user posted deals on computer parts.

• https://slickdeals.net/deals/video-card/ Website that takes a high percentage of the affiliation / referral price of a sale. Nevertheless, it has deals on the GPU.