Argo Blockchain plc (LON: ARB): Should you invest in this crypto firm?

 



Highlights

·       The BTC mining of the Cryptocurrency miner Argo Blockchain plc has declined from 166 BTC in April to 124 BTC in May 2022.

·       Due to the overall lower mining, mining revenue of the company fell from £5.52 million in April to £3.07 million in May.

·       The company must allot new Ordinary Shares at £0.4950 per share to the members of DPN LLC in connection with its acquisition.

 

London-based globally leading cryptocurrency miner, Argo Blockchain plc (LON: ARB), has been in the news lately after announcing the allotment of new shares linked with the acquisition of DPN LLC. The company has also released its operational update for May 2022 recently.

ARB’s takeover of DPN LLC and operational update

 

Argo Blockchain plc is a leader in developing blockchain technologies using renewable sources of power. In March 2021, the energy-efficient bitcoin miner took over DPN LLC in addition to the land held by DPN LLC for the company’s flagship Bitcoin mining facility in Texas, Helios. Under the agreement related to the acquisition, the company must issue 8,147,831 new Ordinary Shares at £0.4950 per share to the members of DPN LLC.

According to the recent operational update released by Argo Blockchain on 7 June, 124 Bitcoin or Bitcoin Equivalents (BTC) were mined by the company during May. This was low as compared to the mining carried out in April, which stood at 166 BTC. Various factors were responsible for this decline, which included troubles in the Bitcoin network.

Reasons for dip in mining activity

 

Mainly owing to the short-run probabilistic results, a considerably lower Bitcoin was mined as compared to the past months by the Argo Blockchain’s hashrate on Terra Pool. The company is aiming for the optimisation of its hashrate across all the alternate pools. Additionally, mining operations of the company were restricted, and power usage at Helios was cut down due to higher power demand in Texas amid soaring electricity prices. Unplanned interruptions were also faced by the company at Helios as it established the online presence of its new facility.

 


Due to the overall lower mining, the mining revenue of the company fell from £5.52 million in April to £3.07 million in May, based on the month’s day-to-day foreign exchange rates and crypto prices.
Down from 75% in April, this income was generated at a BTC Margin of 62% in May. The decline in this percentage can mainly be attributed to the lesser price of Bitcoin and the reduced mining of BTC. 2,379 Bitcoin, which included 187 BTC Equivalents, were held by Argo Blockchain as of 31 May 2022.

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 ARB’s share price performance

 Argo Blockchain plc has been trading on the main market of the London Stock Exchange since August 2018. The company’s market cap stands at £164.85m as of 21 June 2022. The performance of Argo Blockchain has deteriorated over the past year, and its returns on one-year and YTD basis stand at -75.21% and -64.11%, respectively, as of 21 June 2022.

Bottomline

 Bitcoin’s price has been on a downslide lately and thus ARB, shares have also been falling. The company has been trying to scale up its operations, which may lead to potential gains for its investors in the long run. The Helios facility could prove to be a major asset for the company. However, rising inflationary pressure and interest rates are weighing on the crypto market by negatively impacting investor sentiment. Investors must keep an eye on ARB shares once the economy starts stabilizing.

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