[...] if you GPU mine you can dump for a fraction of the price [...]
Saying that you need to assume that GPU mining Primecoin is not only significantly faster than CPU mining, but more energy efficient as well (otherwise you can consider it an increasing number of CPU miners). First steps in implementing GPU mining software allow to hazard a guess that the difference between CPU and GPU mining primecoins might not be as significant as it was for the cryptocoins that have hash based proof-of-work approaches.
But even if a GPU miner is faster, the rewards per block will react to that increase of network calculating power. So you might add more power to the network, but in difference to other cryptocoins, where this allows you to get bigger parts of the constant rewards, Primecoin "punishes" you for hugely increasing the calculating power with decreasing rewards.
That leads me to the assumption:
it is hard to predict the influence of GPU miners for Primecoin. In my humble opinion they will have a lesser impact than they had for other coins - in terms of increasing the calculating power. So I assume, the price will not be very dependent on GPU miners. And even if the GPU miners brought much more calculating power to the network, that reduced the amount of generated coins over time which could have a stabilizing effect on the price.
I don't see that huge drop coming. But my crystal ball is under maintenance so I can't tell for sure...
I just want to add a rough estimation.
Say the GPU miner increases tenfold the calculating power compared to a CPU miner (I'm not saying anything about GPU/CPU types, models, etc.
).
Say the GPU miner needs double the electricity as the CPU miner for that tenfold increase.
If you are the one and only with such a GPU miner you have a fivefold energy efficiency and a tenfold reward per time.
But as soon as others draw level, something happens:
compared to the current difficulty (now) of approximately 9.86 a complete replacement of CPU miners by GPU miners would push the difficulty to roughly 10.86 (assuming that the tenfold increase does this, but afaik this is the logarithmic way how the difficulty works).
The result for the rewards per block would be a decrease from 999/(9.86)^2=10.27 to 999/(10.86)^2=8.47
From that moment on the energy you spend is still double, but the rewards have dropped to 82% of what they have been before (I know it is much more dynamically, but I try to create a scenario
).
Either the price per Primecoin rises or the miners have to consider bailing out - if they don't want to invest more money for buying electricity than they had to for buying the same amount of Primecoins at an exchange (and buying at an exchange rather than mining would be a rational consequence!)
So I (once more without crystal ball and without engagement) expect the Primecoin price not to drop that much just by the rise of GPU miners (based on the aforementioned assumptions).