If you've been following crypto news, you'll have heard about the price crash for many major coins, including Bitcoin and Ethereum. This fall in value has led several miners to sell their equipment—mainly GPUs—as the operational cost no longer makes sense at crypto's reduced price.
Does this news mean there will be a glut of GPUs on the market? Can we now buy GPUs from our favorite retail stores at or near MSRP? Let's examine the recent event's impact on the PC hardware market.
What Caused GPU Prices to Skyrocket?
Two of the main factors that drive prices are supply and demand. The 2020 global pandemic hit chip manufacturers hard, especially in China, where many operate. As the virus spread, ports and shipping lanes around the world jammed as countries closed borders to stop the sickness from entering.
With the pandemic in full swing, governments enforced lockdowns, causing businesses to shutter and forcing many to work at home. However, as the year went by, many people discovered that mining crypto, especially Bitcoin and Ethereum, could be lucrative.
With the pandemic lockdown, loss of many jobs, and other global events, Bitcoin prices skyrocketed from around $6,000 in March 2020 to more than $55,000 just one year later. The nearly tenfold increase further increased crypto hype, which relied on GPUs for processing.
A lack of supply has caused GPU prices to increase. Increased demand contributed to the increase, leading to empty shelves, scalpers, and high online prices.
Crypto Crash and GPU Pricing
Just two months after reaching its all-time high of $60,000 in November 2021, Bitcoin fell to a little over half at $36,000. This dip caused miners who weren't too invested in the system, or those with higher electrical costs, to quit mining. After all, if the value of the coin you're mining falls below a threshold, the dollar amount you receive can't cover your operational cost.
A bigger crypto crash happened in June 2022, where many cryptos were wiped out. Bitcoin dropped to around $20,000, reaching only a third of what it was worth about six months before. Even Ethereum, which had an all-time high of around $4,800 in November 2021, fell below $1,000 on June 18, 2022, before stabilizing at around $1,100 for the rest of June 2022.
Due to the lower demand from miners, GPU prices have begun to ease nationwide. You can now find top-end GPUs like the RTX 3090 Ti, 3090, and 3090 Ti at or below SRP prices. However, many entry- and mid-level video cards are still priced above their SRPs.
Should You Buy a Used Crypto Mining GPU?
The sudden drop in crypto prices has made cryptocurrency mining unprofitable. Because of this, many are selling old GPUs at low prices to help recoup their losses. The easy availability and low prices of used GPUs from crypto miners make it a tempting option for gamers. This is especially true for those waiting for years to get a mid-range GPU at or below SRP.
However, you should be aware of the risks when buying a GPU that's been crunching numbers for days or even weeks. That's because they're liable to fail prematurely, given the stress they've been on. After all, no amount of cooling will stop wear and tear. According to hardware manufacturer Palit (as per a PC Gamer report), a mining GPU will lose around 10 percent of its performance each year, while there are more than enough images detailing how mangled crypto mining hardware becomes over time.
In short, any report claiming that old crypto mining hardware is just as good as any other second-hand GPU should be taken with a pinch of salt, especially as the quality of each GPU is unknown, nor is the level of ventilation in the crypto mining operation.
Furthermore, crypto miners are known for flashing the BIOS of their GPUs or overclocking them to get the best possible performance per watt. That's why you should always check if the GPU you're buying was modded for mining. You could also buy an Nvidia LHR GPU, as these video cards are designed to limit their usability for mining.
Don't Buy Old Crypto-Mining GPUs Without Seeing Them First
The crypto crash, the ease in global restrictions, and increased manufacturer output are slowly alleviating the GPU crunch. If no other international incidents happen, we can look forward to the video card supply finally normalizing and hitting an equilibrium.
If you absolutely must have a GPU, you're in luck, as you don't have to spend too much to get one. But if it's not your immediate need, you can wait a little longer until prices drop to SRP or even lower and set yourself apart from the risk of old crypto mining hardware.