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Why Argo Blockchain (ARB) Shares Plunged 6.65% on H1 Results

Simon Mugo trader
Updated 26 Aug 2022

Trade Argo Blockchain Shares Your capital is at risk

Key points:

  • Argo Blockchain shares plunged 6.65% on mixed half-year results.
  • The miner’s revenues fell on lower Bitcoin prices as they made paper losses.
  • However, a recovery in Bitcoin prices could boost Argo shares.

The  Argo Blockchain PLC (LON: ARB) share price plunged 6.65% after releasing its unaudited results for the first half of 2022. The company’s overall revenues and profit margins fell due to lower Bitcoin prices and the increased network difficulty.

Despite the lower Bitcoin prices and greater mining difficulty, Argo Blockchain mined 939 Bitcoins and BTC equivalent in H1 2022, representing a 6% improvement from last year’s figures. The company’s BTC holdings also surged 54% to 1,953 at the end of June compared to last year’s 1,268 BTC.

Also read: Bitcoin Alternatives.

We have noted that holding BTC is an excellent long-term strategy when BTC prices are rising. However, companies can run into problems when BTC prices fall as they may be forced to sell the Bitcoin at a loss to meet their short-term cash needs.

Hence, companies should be selling some of their Bitocin periodically, especially when prices are surging higher, to book some profits, even as they hold some of their cryptos for more considerable gains in future. The recent crypto decline is an excellent example of what most crypto holders should do in the future.

Argo Blockchain registered a pretax loss of £36.9 million ($44.9 million), driven by the lower Bitcoin prices. Luckily, this is an unrealised loss since the company is still holding Bitcoin on its balance sheet and could benefit from high prices in future.

The company;’s mining margin fell to 71%, driven by the lower Bitcoin prices and the increased mining difficulty. However, Argo continued acquiring Bitcoin mining machines and installed 10,000 S19J Pro machines from Core Scientific, completing its transition into a self-hosted Bitcoin mining company.

Argo is also acquiring and installing 20,000 S19J Pro machines from Bitmain, which is set to be completed in October 2022. In addition, the company is working with ePIC Blockchain Technologies (ePIC) to develop and deploy custom mining machines that use the Intel® Blockscale™ ASIC chips.

Overall, Argo’s prospects look pretty promising, with the only drawback being the weak Bitcoin prices. Therefore, a recovery in Bitcoin prices is likely to boost Argo’s share price.

*This is not investment advice.

Argo Blockchain share price.

Argo Blockchain share price 26-08-2022
Source: Tradingview

The Argo Blockchain share price plunged 6.65% to trade at 38.31p, falling from Thursday’s closing price of 41.04p.

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