The Argo Blockchain PLC (LON: ARB) share price plunged 9.85% after announcing that it mined 135 Bitcoin and BTC equivalent in February compared to the 172 BTC mined in January 2022.
The Bitcoin mining company attributed the lower numbers to the harsh weather conditions in February that led it to reduce its electricity consumption in all its facilities so that other consumers could have an adequate electricity supply.
The company also noted that the global Bitcoin mining hash rate surged to record highs limiting the number of Bitcoins it could mine due to the increased network difficulty.
Argo curtailed its mining operations at its facilities in Baie Comeau, Quebec and Mirabel to reduce the amount of electricity consumed at the sites in light of the higher electricity usage by other consumers due to the harsh winter weather.
The company took the opportunity to remind investors that crypto mining companies do not have to be a threat to a country’s electricity grid. Instead, they can act as a stabilising force by taking the excess electricity generated during normal operations and lowering their consumption during periods of peak demand.
The recent drop in Bitcoin prices also did not work in Argo’s favour as a Bitcoin miner whose revenues are directly linked to Bitcoin prices.
Peter Wall, Argo Blockain’s interim Chairman and CEO, said: “During February, we have experienced exceptional weather conditions and are hopeful that these are behind us. Regardless of this, we have continued to ensure that Argo is set to grow and deliver on its intended objectives for the forthcoming year. The company’s recent appointment of Raghav Chopra as an independent non-executive director continued progress with the construction of the Helios facility, and the supply agreement we have signed with Intel are testaments to the fact that we are on the right track to achieving our goals for the year.”
However, Argo Blockchain remains one of the strongest players in the Bitcoin mining space. Currently, the firm is constructing its flagship 200 MW mining facility known as Helios in Dickens County, Texas.
Argo revealed that it had ordered an extra four Main Power Transformers for its Helios facility to be delivered in Q1 and Q2 2023. The new transformers will deliver 600 MW of power to the facility. However, the company did not specify if there were any expansion plans for the facility.
The Bitcoin miner also signed a supply agreement with Intel Corporation and has pro-rata allocation rights to buy a batch of Intel’s new blockchain accelerator chips, with delivery slated for H2 2022.
Argo Blockchain shares have fallen 41.2% in 2022 and seem attractive at current prices. I would buy the shares now, but we cannot rule a further decline.
*This is not investment advice. Always do your due diligence before making investment decisions.
Argo Blockchain share price.
Argo Blockchain share price plunged 9.85% to trade at 54.99p, falling from Friday’s closing price of 61.00p.
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Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading