The Argo Blockchain PLC – ADR (NASDAQ: ARBK) stock price fell 17.6% earlier today despite the lack of news from the crypto miner as investors digested last week’s events which were a significant departure for the company.
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The crypto mining company announced that it had sold its flagship Helios mining facility to Galaxy Digital, the crypto investment firm operated by Mike Novogratz, for $65 million. However, the company did not sell its Bitcoin mining machines during the transaction.
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Instead, Argo Blockchain signed a deal with Galaxy Digital to keep operating its mining machines from the facility. This was a smart move, given that selling its mining machines should be considered the last option, given that the company is a crypto miner.
The crypto miner has fallen on hard times due to the ongoing crypto winter that has seen Bitcoin prices fall to record lows from highs above $60,000. Bitcoin is trading at around $16,600, having lost over $44,000 of its peak valuation when many were calling for it to hit $100,000 per coin.
Like many other crypto miners, Argo Blockchain failed to capitalise on the record-high Bitcoin prices earlier in the year, instead choosing to hold on to their Bitcoin, hoping for better prices, which did not materialise.
Argo Blockchain used the proceeds of the sale to reduce its outstanding debts by $41 million while taking on an additional $35 million loan from Galaxy Digital, which it plans to use to stabilise its operations and survive the current harsh environment.
Most analysts expect crypto prices to start recovering from mid-2023 when central banks resume their easy money policies to revive most economies, which are teetering on the verge of a recession.
The crypto winter has proven that Bitcoin is not an uncorrelated asset like many thought in the past. Instead, Bitcoin and cryptos go through the same phases as other asset classes, with crypto prices being significantly influenced by mainstream fiscal and monetary policies.
*This is not investment advice.
Argo Blockchain share price.
The Argo Blockchain share price fell 17.6% to trade at $0.8900, from Friday’s closing price of $1.08.
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.
