Key points:
- Argo blockchain shares plunged 25.3% on its September production data.
- The company’s BTC mining output slowed down compared to August.
- Investors were disappointed by the results.
The Argo Blockchain PLC (LON: ARB) share price plunged 25.3% after announcing that it mined 215 Bitcoin in September 2022 compared to 235 Bitcoin and Bitcoin equivalents (BTC) mined in August. The cryptocurrency mining company attributed the lower output to a 12% increase in Bitcoin’s mining difficulty.
Also read: Best Way To Buy Bitcoin.
As Bitcoin investors know, the mining process tends to get more challenging with each mined coin since there are fewer coins to mine, yet the computing power of miners keeps going higher, as does the number of miners. However, many expect the company to keep upgrading its mining hashrate to maintain its output.
Argo Blockchain is doing the opposite; instead of expanding its operations, the company is shrinking its operations, as outlined in my previous article. As a result, the company’s shares plunged almost 17% after unveiling plans to raise £35 million.
Argo plans to raise the above funds by selling 3,400 Bitcoin mining machines, which could lower its mining hashrate, making it less competitive against its peers. However, despite selling some of its older machines, Argo is currently deploying newer mining machines.
The company held 512 Bitcoin, of which 167 were BTC Equivalents, at the end of September. However, it continued monitoring market conditions because it uses multiple derivatives to manage its BTC holdings and risk exposure.
Argo revenues from mining activities fell to £3.78 million ($4.27 million*) compared to the £4.39 million )$5.23 million*) generated in August. The company’s mining margins improved to 25% in September from 20% in August.
Argo Blockchain also made some changes to its management board with the departure of its Chief Technology Officer, Perry Hothi, on October 15, 2022. Jean Esquier, the current Vice President of Technology and Development, will take over the role. The company further appointed Jason Zaluski as the Vice President of Mining.
Moreover, the company is still installing its Bitmain S19J Pro Machines at its Helios facility, which will boost its total hashrate capacity to 2.9 EH/s by the end of October, marking an 81% increase in the total hash rate capacity since Q1 this year.
*This is not investment advice.
Argo Blockchain share price.
The Argo Blockchain share price plunged 25.3% to trade at 15.499p, falling from Monday’s closing price of 20.75p.
