Key points:
- Argo Blockchain today announced a central pivot into the crypto ecosystem.
- However, investors largely ignored the move, given the slight rally in its shares.
- Unfortunately, the company’s share price is closely linked to Bitcoin’s price.
The Argo Blockchain PLC (LON: ARB) surged 6.71% after announcing a significant pivot into the broader crypto ecosystem via its Argo Labs division.
Today, the Bitcoin mining company revealed that it would allocate 10% of its crypto assets to Argo Labs.
Some of the crypto assets will be used for network participation functions such as operating validators and nodes, providing infrastructure support and staking innovative projects.
Also Read: 5 Top Cryptocurrencies To Buy in 2022.
A significant portion of the allocated assets, which are part of its treasury holdings, will be deployed to support early-stage crypto projects, participate in decentralised finance (DeFi) projects, and invest in non-fungible tokens (NFTs) and their platforms.
Argo Blockchain also intends to invest in Metaverse projects. Unfortunately, investors seem to have missed the importance of today’s announcement, which could unlock new revenue streams for the crypto mining company.
Peter Wall, Argo Blockchain’s CEO, said: “Argo has long been a supporter of the proliferation of crypto and blockchain technology. Argo Labs gives us the opportunity to integrate cryptocurrencies into existing financial infrastructure, gain exposure to the wider digital asset ecosystem, and provide long-term value to our shareholders.”
Vakeesan Mahalingam will head the Argo Labs division, where he will use his 8+ years of experience in the investment industry to steer the unit. He is expected to manage the assets allocated to the division and grow them over time.
Mahalingam said: “Our vision at Argo Labs is to support the Company's mining efforts by engaging with the disruptive and innovative sectors of the crypto ecosystem,”
Adding:
“We are committed to growing all facets of this industry and look forward to spearheading this effort alongside my talented colleagues.”
I believe that today’s announcement holds a lot of promise for Argo Blockchain, given that it currently holds a significant amount of Bitcoin within its Treasury, a portion of which will be allocated to Argo Labs.
However, it appears investors are waiting for the new investment division to announce its first investments before making up their minds, which is fine by me.
Argo Blockchain shares have fallen 2.41% since the year started and are pretty attractive at current prices. However, the company’s share price is closely tied to Bitcoin prices. Therefore, its share price could rise if Bitcoin prices do the same.
*This is not investment advice. Always do your due diligence before making investment decisions.
Argo Blockchain share price.
Argo Blockchain shares rose 6.71% to trade at 87.50p, rising from Tuesday’s closing price of 82.00p.
