Bitcoin miner Argo Blockchain doubles in value

• Updated

Bitcoin miner offloads Texas facility to Galaxy Digital

Mining Rig                                 
Argo Blockchain stock plunged by more than 90% in 2022 - Photo:Shutterstock
                                

Shares in the bitcoin miner Argo Blockchain have doubled in value in five days after the company announced it had agreed to sell its Helios mining facility in Dickens County, Texas, to Galaxy Digital.

In addition to continuing to host Argo’s machines at the Texas facility, Galaxy will provide the bitcoin miner with a new asset-backed loan of $35m with an initial term of 36 months. The 23,619 Bitmain S19J Pro mining machines currently at Helios will be used as collateral.

At 17:30 UST on Wednesday December 28 the company’s shares stood at 6.45p, having briefly touched 9.5p during the day. However, they are still down more than 90% on their price a year ago.

Argo’s CEO, Peter Wall, described the deal as “transformational”. He said: “It reduces our debt by $41m and provides us with a stronger balance sheet and enhanced liquidity to help ensure continued operations through the ongoing bear market. It also allows us to focus on optimizing our operations with significantly lower capex and opex requirements."

He added that the company’s miners currently operating at Helios will continue to be hosted at the facility by Galaxy.

Argo Blockchain rose to prominence during the Bitcoin bull market of 2020 and 2021. In the three months to the end of February 2021, the company’s stock rose from 9.60p to 282p, a climb of more than 2,800%.

Such momentum proved unsustainable, however, and Argo’s stock fell to 144p by November 2021, despite Bitcoin reaching an all-time high. The losses suffered by the world’s largest cryptocurrency in 2022 further weighed on the miner, dragging it to a low of 2.5p in mid-December.

The company is by no means an anomaly. All prominent bitcoin miners suffered following the onset of the “Crypto Winter”. Before Christmas, Core Scientific, which had been responsible for around 10% of computing power on the bitcoin network, filed for Chapter 11 bankruptcy protection in the United States.

Bitcoin traded at $16,683 on Wednesday afternoon, having started the year at $46,300.

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