In case you haven't noticed, the cryptocurrency market has been falling off of a cliff at terminal velocity, only occasionally jumping to a manageable –less heart attack-inducing– decline from its February-march highs, and there is talk among gamers that this will somehow make GPU prices drop to a price that doesn't involve donating both of your kidneys for one. This is not likely, and here is why...
Let's start with what cryptocurrency is, and what gaming video cards –or GPUs– have to do with it.
What is Cryptocurrency?
Cryptography is an encryption system that works by spreading chunks of a certain type of information over a series of computers or –ASIC systems– across the world. This information is usually something called smart contracts, which is just a regular contract, that spreads itself all over the place until the moment someone wants to verify its authenticity. Since the information is divided, spread, and copied onto multiple computer systems across the world, it's nearly impossible to fake a smart contract without the other divided copies proving the fake one is a fraud. This is ideal for financial transactions, which is where Cryptocurrencies like Bitcoin come in.
With most crypto, the currency itself is not the primary focus of the technology, but the byproduct of it. In Ethereum's case, as well as many of its derivatives like Chainlink and Minds Token, the "token" or cryptocurrency, is a reward for running a piece of the network. Hosting this data on your own computer gives you a trade-able cryptocurrency full of a string of rare numbers that can be traded for other -more valuable- currencies. Since the currency has a perceived value, a money market has formed behind it, with people betting on the cryptocurrency's futures, using websites like Crypto.com and Coinbase.
What does this have to do with graphics cards being expensive?
Well, the vast majority of processing power for cryptography requires APUs, which you can only find in two types of machines: ASICs –the purpose-built machines designed for specific computation-heavy tasks like encryption and cryptography– or modern gaming video cards, which have similar capabilities, only the APUs that power the super high resolution graphics can be re-purposed for other uses, such as cryptography. ASICs (Application-specific integrated circuits) are often in the tens of thousands of dollars range, and so modern day video cards are a more cost-effective way to get the same results.
Unfortunately for gamers, this means large corporations looking to capitalize on this booming crypto industry, buy up the vast majority of gaming GPUs. This was what happened way back in 2019 with the very first "GPU crisis", as major overseas companies would buy tens of thousands of gaming GPUs, fly the bulk of those GPUs overseas on private jumbo jets, drying up the GPU market for everyone else. This scarcity of gaming cards for gamers is what drove the horrifying prices we have today.
It won't get better any time soon.
Since Elon Musk likes to send emojis and say words on Twitter to screw up the crypto market, crypto stock prices have been taking repeated nose dives, with only the bull buyers keeping the entire market afloat. If you want a gaming GPU without having to miss two months rent, you might think the price is going to go down, since their value for crypto is less. Unfortunately, there is one more problem: The global chip shortage.
There just aren't enough chips on the market –anywhere in the world– to make a large enough inventory to drive the value/price down. Ever since the global pandemic caused by COVID-19, supply chains for factories all over the world were crippled for over a year. The global economy nearly came to a screeching halt, as components for chips that used to come from several countries, had closed borders in a failed attempt to stop the spread. Typically, chip makers are ahead of the system; making more chips than they would ever need. Now, they are behind, and demand for chips is the highest its ever been, and this is driving up the manufacturing costs. Higher costs to make GPUs is even worse than high demand from crypto miners, since the cause of the price hike in GPUs isn't caused by the artificial scarcity of the crypto market, but by the very real limitations of post-pandemic manufacturing. Not enough manpower, factories, or hours in a day to meet –let alone exceed– the demand for silicone chips means these god-awful prices might be here a while.
If you're still a PC gamer after hearing that, your best bet is to buy a previous gen GPU. Don't even bother with current gen until the demand for the GPU is low enough to drive the price to a reasonable range. Of course, the "triple-A" game developers will inevitably try and manipulate the market by forcing their games to require cutting-edge hardware to run, making it nearly impossible to run their games at a decent frame-rate unless they buy into the current-gen ponzi scheme, but don't fall for it. You are losing money the more you fall for it.
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