Bitcoin/Cryptocurrency Craze Wipes out AMD GPU Supply

By | May 28, 2017

PC gamers may find themselves struggling to find AMD’s RX 570 or RX 580 available anywhere near it’s MSRP. The great surge in demand comes from the recent spike in the price of Bitcoin, which has increased from roughly $500 a year ago to $2193 as of the time of writing. When Bitcoin’s price rises, the USD value of other crypto-currencies such as Litecoin and Ethereum usually rise proportionally to Bitcoin.

Crypto-currencies are an emerging, decentralized, peer to peer currency sent using the internet. Their money supply initially comes from a process known as “mining” in which computing devices such as GPUs perform luck-based operations that are used to claim “block rewards” containing the currency. The primary purpose of cryptocurrencies is to eliminate the need for trust in a central organization such as a bank, although many cryptocurrencies such as Ethereum have adapted additional features such as “smart-contracts”.

While the mining of Bitcoin and Litecoin using GPUs has become obsolete due to specialized devices know as ASICs, Ethereum is currently extremely profitable to mine using GPUs. An Ethereum miner can expect to earn $100-150  per month worth of Ethereum per RX 580 they mine with, based on current exchange rates and a variable called “difficulty”, which makes mining less profitable as more mining power comes online. This current rate of profitability is expected to drop in the future(this is not the first mining craze), so miners are buying as many cards as they can now to take advantage of it while they can.

If the trend continues, the supply of NVIDIA GPUs may be threatened too. The GTX 1070 mines at a rate similar to the RX 580. With prices of RX 580’s surpassing the GTX 1070, miners may choose to purchase NVIDIA GPUs for mining purposes.

 

The RX 570, with a MSRP of $169, is being sold for over double its intended price

If you’re looking to sell a used AMD GPU such as a RX 470/480 with the intent to upgrade, now may be the best time to sell, while the demand is extremely high. If mining profitability drops to the point of not covering electricity costs(highly probable), there will likely be a mass selloff of AMD cards, thus crashing the price of used AMD GPUs. Such an event may create an opportunity to pick up used AMD GPUs for cheap, but buyers should be cautious, as cards used for mining are under heavy load 24/7.

 

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Additional information:

https://bitcoin.org/en/

https://litecoin.org/

https://www.ethereum.org/

 

Disclosure: Author owns 2 shares of AMD valued at a total of $22 as of date of publication. Author holds less than $5 worth of cryptocurrency(primarily in Bitcoin) as of time of publication.

 

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