China bans crypto, GPU price drop Imminent?


China bans crypto completely! Could this latest blow to cryptocurrency lead to another GPU price drop after recent Nvidia GPU and AMD GPU price increases? How will this affect graphics card availability in the wider world outside of China? Read on to find out more.

Recent graphics card price movement & GPU availability

GPU availability and GPU price chart AMD Nvidia graphics cards Q3 2021 2

As we recently reported in our piece on 3D Centers latest findings about graphics card prices and GPU availability, after reaching their peak in May 2021, we saw GPU prices fall significantly (Nvidia GPU prices in particular) and availability increase up until July 2021, at which point this trend began to reverse. By September 19, 2021, both AMD and Nvidia graphics card prices were back up to about 170% MSRP, though still well below their May peaks, this was a disappointing change for those hoping to get their hands on a GPU for Black Friday / Christmas 2021.

PBOC bans: Bank of China bans crypto

For several months now the Chinese government has made it difficult for its citizens to mine and trade in crypto. Up until now this was done in a fairly piecemeal manner, varying in its enforcement from region to region. Now hoever the PBOC (Peoples’ Bank of China) has announced it will be illegal for Chinese residents (not just citizens) to purchase cryptocurrency domestically or from overseas. Taking things to an either further extreme: Chinese residents have been prohibited from even being associated with the marketing of cryptocurrencies or giving tech support to crypto businesses.

Following the first partial Chinese crypto ban back in May 2021, the price of Bitcoin dropped by 20%.

At the time of writing, the bitcoin price drop over the last 24 hours is 6%.

How could China FUD affect GPU prices?

For those uninitiated into crypto lingo, FUD means Fear Uncertainty & Doubt as they are associated with the market’s confidence in a crypto currency. We’re already seeing the first hit to Bitcoin prices as discussed above and other coins will also get hit through this latest setback, given how central China is to crypto mining.

Crypto miners have been a big source of demand for graphics cards, in particular Nvidia GPUs, causing the price of graphics cards to skyrocket, and contributing heavily to the global graphics card shortage.

After the Chinese crypto clampdowns earlier in the summer, we saw a raft of second-hand Chinese Nvidia GPUs selling on the Chinese market, as crypto miners accepted the inevitable and sold their mining rigs.

There was also a noticeable drop in graphics card prices and an improvement in availability globally, as you can see in the graph above.

There is no doubt that this latest ban will have a similar effect on GPU prices – if demand is lower and supply remains the same, then graphics card prices will drop, though by how much and for how long is anybody’s guess. It’s very unlikely to bring an end to the graphics card shortage, but with a bit of luck, the silver lining of the China crypto ban might be that some of us may be able to get graphics cards on Black Friday!

Keep locked into WePC for further updates on the global graphics card shortage and GPU price news.



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