Surging cryptocurrency prices caused demand for NVIDIA (NASDAQ:NVDA) and AMD's (NASDAQ:AMD) high-end GPUs to spike over the past year. That sounds like great news for the two chipmakers, but the supply shortages and soaring market prices are also alienating their core gaming customers.

GameSpot's Jimmy Thang recently told readers that "due to the cryptocurrency craze, which is skyrocketing the price of graphics cards, now is a really bad time to buy a GPU."

Thang noted that NVIDIA's high-end GTX 1080 Ti, which has an MSRP of $700, now has an average street price of $1,350. The GTX 1080, which has an MSRP of $550, has an average street price of $1,100. AMD's top-tier RX Vega 64 has a whopping street price of $1,500 -- triple its MSRP of $500.

A row of cryptocurrency miners.

Image source: Getty Images.

In late January, Shrout Research's Ryan Shrout told CNBC that "with availability consumed by the cryptocurrency mining market, there is little chance for any PC gamer to find a graphics card in stock, let along close to the expected price point." Shrout warned that as gamers and enthusiasts delay their upgrades, it could hurt "all other component vendors from processors to motherboards to storage."

CNBC's Tae Kim also warned that AMD and NVIDIA shouldn't "take the PC gaming market for granted," since gamers could simply buy "more powerful consoles such as the recently released Xbox One X" -- which has a base price of just $499. So what steps should NVIDIA and AMD take to protect their core customers from price gougers?

What cryptocurrency means to NVIDIA

Last quarter, NVIDIA reported that its cryptocurrency-related revenues had dropped 53% sequentially to $70 million, or 3% of its top line. That slowdown indicates that direct purchases of new NVIDIA GPUs for mining were slowing down, but that low supplies in the market were still propping up the street prices.

During the conference call, CEO Jensen Huang stated that cryptocurrency-related revenues were "small for us, but not zero." Meanwhile, NVIDIA's total gaming GPU revenues rose 25% annually to $1.56 billion, or 59% of its top line. Therefore gamers, not miners, are still NVIDIA's core customers.

That's why NVIDIA recently took measures to protect gamers from price gougers. The company is asking retailers to limit the number of cards per order to two or three to discourage bulk orders from miners. However, NVIDIA admitted that retailers aren't required to follow that "recommendation".

What cryptocurrency means to AMD

Unlike NVIDIA, AMD doesn't disclose its cryptocurrency-related revenues. However, Jefferies analyst Mark Lipacis estimated that cryptocurrency demand generated $75 million to $100 million in revenues for AMD during its third quarter, which would account for 5%-6% of its top line.

During that quarter, AMD's total Computing and Graphics revenue (from x86 chips and GPUs) rose 74% annually and accounted for half of its top line. Therefore, AMD is in a similar position to NVIDIA -- crypto demand provides a slight boost to its revenues, but most of its GPU demand still comes from PC gamers. CEO Lisa Su expects there to be "some leveling-off" in cryptocurrency demand over the next few quarters.

Unlike NVIDIA, AMD hasn't directly addressed the price gouging issue. However, some consumers accused AMD of encouraging price gouging. Last September, Gamer Nexus' Steve Burke noticed that AMD directly promoted (via a tweet) the "sale" of its RX 570 for $279 -- when the card had an MSRP of $179. PR missteps like this could tarnish AMD's reputation for providing cheaper alternatives to NVIDIA's cards.

It's not an easy problem to fix

This isn't the first time NVIDIA and AMD faced a crypto-related GPU shortage. It also occurred during the first bitcoin boom of 2013, and again last June as cryptocurrency prices surged.

NVIDIA and AMD will try to address this problem by producing more chips, but most of their cards are produced by third-party manufacturers, which have their own production bottlenecks.

But that's not all. Mining hardware makers like Bitmain often directly buy chips from foundries like TSMC, which throttles NVIDIA's production capacities. Big mining farms also purchase large quantities of GPUs from Chinese factories before they are sold on the open market. Lastly, smaller miners buy cards in bulk when they finally reach retailers, forcing gamers to buy cards at inflated prices from resellers.

The key takeaway

If cryptocurrency prices continue soaring, the problem could get much worse for NVIDIA and AMD, which could see their core gaming GPU sales dry up as gamers postpone PC upgrades or simply buy cheaper consoles. It's unlikely that cryptocurrency demand will offset those declines, and both chipmakers' revenue growth could dry up.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.