Key points:
- Argo Blockchain shares fell 6.3% on the July operations update.
- Investors reacted negatively to the firm selling over 800 bitcoin.
- Read on to find out what comes next for ARB shares.
The Argo Blockchain PLC (LON: ARB) share price fell 6.33% after its July operations update was released. Investors reacted negatively to the report after the Bitcoin mining company had to sell some of its Bitcoin to meet its debt obligations.
Argo sold 887 Bitcoins at $22,670 each to generate $20.1 million in cash for the company’s operations and to repay its outstanding debt obligations to Galaxy Digital. Argo has a BTC-backed loan with Galaxy Digital and has an outstanding loan of $6.72 million after settling a significant portion of the loan.
Also read: When Is The Best Time To Buy Crypto?
As I had warned in the past, companies that hold Bitcoin may have to sell the world’s leading cryptocurrency to generate much-needed cash for their business. For example, Elon Musk had to sell most of Tesla’s Bitcoin holdings to generate $936 million in free cash flow for the EV manufacturer in Q2 2022.
Other miners and businesses that hold massive amounts of Bitcoin are sitting on unrealised losses worth billions. However, Bitcoin’s long-term outlook remains pretty bullish, and I expect the cryptocurrency to regain most of its recent losses once the Fed changes course and resumes its QE programs.
Meanwhile, Argo noted that it had taken some of its S17 and T17 miners from its mining fleet due to a high failure rate, significantly reducing its operating hash rate by 460 PH/s. The Bitcoin miner plans to retire all its 17 series miners, despite the negative impact on its hash rate.
Argo Blockchain also completed the mining machines swap with Core Scientific, as it switched to fully operating its machines instead of using third parties. The company received approximately 10,000 S19 miners during the swap.
On a positive note, Argo Blockchain mined 219 Bitcoin and BTC equivalents in July, improving the 179 BTC mined in June. The miner was holding 1295 Bitcoin at the end of the month.
While Bitcoin’s long-term prospects remain favourable, investors hope Argo will not have to sell more Bitcoins before the price recovers to its all-time highs of $65,000.
*This is not investment advice. Always do your due diligence before making investment decisions.
Argo Blockchain share price.
The Argo Blockchain share price fell 6.33% to trade at 37.00p, falling from Thursday’s closing price of 39.50p.