Argo Blockchain (ARB) Shares Plunged 9.09% After Mining Less Bitcoin

Key points:
Argo Blockchain shares plunged 9.09% on lower May Bitcoin output.
Investors were disappointed by the results because of the Helios facility.
ARB shares look attractive but could fall further if Bitcoin prices keep falling.

The Argo Blockchain PLC (LON: ARB) share price plunged 9.09% after its May operations update, showing that it mined less Bitcoin in May than in April despite starting mining operations at its flagship Texas Helios facility.

The company mined 124 Bitcoin or Bitcoin equivalent (BTC) compared to the 166 BTC mined in April. One of the leading causes of the lower figures was the higher difficulty of mining Bitcoin witnessed across the Bitcoin network.

Also read: How To Start Trading Crypto – A Beginner’s Guide.

Investors reacted harshly to Argo’s lower production because of the Helios facility. Many could not believe that the company struggled to mine more Bitcoin despite the facility coming online.

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In its defence, Argo said that it had intentionally reduced its mining activities due to a spike in electricity prices driven by high temperature in Texas, which led to a surge in electricity demand for cooling purposes.

Argo Blockchain also experienced unplanned downtime at Helios, expected as the facility started Bitcoin mining operations. However, investors hope the bitcoin mining firm will do much better in June.

The bitcoin mining company also signed a contract to purchase 6,600 mining machines from ePIC Blockchain Technologies. The new machines will be equipped with Intel’s ASIC Blockscale chips after signing a supply agreement with Intel in February 2022.

The deal with ePIC will allow Argo to participate in designing the Bitcoin mining rigs to its specifications to optimise their performance under its preferred immersion cooling technologies. Hopefully, the custom mining rigs will significantly impact Argo’s mining capacity as it becomes harder to mine Bitcoin due to stiff competition and the lower number of bitcoins yet to be mined.

So, should you buy Argo shares? The short answer is that Argo shares are down 50.5% in 2022 and could be headed lower if Bitcoin prices keep falling. However, the shares will likely rise if Bitcoin prices reverse course and head higher.

*This is not investment advice. Always do your due diligence before making investment decisions.

Argo Blockchain share price.

Argo Blockchain shares plunged 9.09% to trade at 45.00p, falling from Monday’s closing price of 49.50p.