Argo Blockchain Shares Down 59% this Year – Will it Get Worse After Bitcoin Halving?

Argo Blockchain (LON: ARB), a London-listed Bitcoin mining company, has seen its share price plummet by a substantial 59% so far in 2024. This decline comes amidst a broader slump in Bitcoin mining stocks.

Bitcoin Halving

One factor exacerbating Argo's woes is the upcoming Bitcoin halving, expected to occur around April 19-20. Halving refers to a pre-programmed event within Bitcoin's code that cuts the amount of new Bitcoin awarded to miners in half, roughly every four years. This inherently reduces the profitability of mining, potentially leading to a sell-off by miners struggling to cover costs.

Argo Blockchain Mining Operations

Argo's share price drop reflects investor concerns about the company's ability to weather this storm. The company's profitability hinges on the price of Bitcoin and the efficiency of its mining operations. Reduced mining rewards could significantly impact Argo's bottom line.

In its March operational update, Argo Blockchain said it mined 103 Bitcoin or 3.3 Bitcoin per day. This represented a 5% increase in daily Bitcoin production compared to the prior month despite the 4% higher average network difficulty.

Argo CEO Thomas Chippas said he was “pleased by the increase in daily Bitcoin production” achieved in March “despite an increase to average network difficulty and the limited downtime from relocating our miners to Baie Comeau following the sale of our Mirabel facility.”

He added: “As we approach the halving, we continue to focus on streamlining our operations and running as efficiently as possible.”

Some analysts believe Argo is well-positioned to navigate the halving. The company has invested heavily in energy-efficient mining hardware. Additionally, a potential rise in the price of Bitcoin post-halving, as has been seen in previous halving events, could significantly improve Argo's prospects.

Only time will tell how Argo Blockchain weathers the Bitcoin halving. Investors will be closely watching the company's performance and the price of Bitcoin in the coming months.