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Bitcoin mining stocks have dropped sharply from their highest levels this year.
Bitcoin price is about to form a death cross pattern on the daily chart.
The US dollar index is forming a golden cross pattern.
Riot Platforms and Marathon Digital stock price remained under pressure as Bitcoin and other cryptocurrencies retreated. The RIOT shares were trading at $11.13 on Thursday, ~45% below the highest level this year. Similarly, MARA shares retreated to a low of $12.14, ~38% below the YTD high.
Bitcoin mining stocks have been in a downward trend in the past few days as concerns about cryptocurrencies continued. Precisely, they have dropped sharply as Bitcoin has dropped from the year-to-date high of $31,000 to $26,000.
Sadly, the situation could get worse since Bitcoin is about to form a death cross pattern. This pattern happens when an asset’s 200-day and 50-day exponential moving averages (EMA) are about to make a crossover. In most periods, the death cross is usually followed by more downsides.
Notably, the US dollar index (DXY) is also about to form a golden cross pattern, pointing to more upside in the near term. If this happens, it means that the dollar index will rise to over $106. Historically, Bitcoin has an inverse relationship with the US dollar.
The dollar index has jumped as investors predict a more hawkish Federal Reserve in the coming months. That’s because economic data from the US have been better than expected. For example, the services PMI figure rose at a faster pace in August.
Further, as shown below, Bitcoin has formed what looks like a bearish flag pattern. In price action analysis, this pattern is also a bearish one. It is characterized by a long line followed by some consolidation.
Therefore, there is a high possibility that Bitcoin will soon have a bearish breakout. If it happens, the next level to watch will be $20,000. If this happens, mining stocks like Riot Platforms, Marathon Digital, and Argo Blockchain will likely continue falling.
The likely catalyst for Bitcoin price will be a decision by the SEC to provide a greenlight for a spot Bitcoin ETF.
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The suspension of trading activity is because of a major announcement by Argo blockchain on Wednesday. Earlier this month, Nasdaq suspended trading activity for the Bitcoin miner on rumors of the bankruptcy filing.
On Tuesday, December 27, Bitcoin miner Argo blockchain announced that it has suspended trading on the Nasdaq platform because of an upcoming announcement expected on Wednesday.
It is a temporary suspension and trading of its American depositary shares (ADS) will resume once again on Wednesday. In its press release, Argo blockchain said that it needs to suspend trading because of an announcement on Wednesday, and also because the London Stock Exchange was closed on December 27.
At our request, @Nasdaq temporarily suspended trading of Argo’s ADSs and unsecured notes for today – Tues Dec 27.
We’ll be making an announcement tomorrow (Dec 28) via RNS before the @LSEplc opens in the UK…we expect trading on Nasdaq to resume tomorrow.#ARB $ARBK #BTC
— Argo (@ArgoBlockchain) December 27, 2022
As stated, the UK-based bitcoin miner is also listed on the London Stock Exchange. Argo blockchain had temporarily suspended trading earlier this month after they announced being at risk of insufficient funds to support internal operations.
The recent development on Tuesday once again puts investors on the edge of staying concerned about the company’s operations.
Earlier this month, Bitcoin miner Argo blockchain accidentally published the draft materials on its website adding that they have inadvertently filed for Chapter 11 bankruptcy protection in the United States. In response, Nasdaq and the London Stock Exchange suspended trading of its shares. However, Argo blockchain later clarified that they haven’t filed for bankruptcy and requested the exchanges to resume trading its shares.
Instead, the Bitcoin miner said that they were in advanced negotiations with a third party to sell certain assets while securing equipment financing. Argo Blockchain noted:
“The company is hopeful that it will be able to consummate the transaction outside of a voluntary Chapter 11 bankruptcy filing in the United States, although there is no assurance that the company can avoid such a filing”.
Earlier in October, Argo had also warned that it could become cashflow negative in the case it failed to raise money after its financial deal fell through. In such a case, the company might have to cease operations.
In another update on December 16, Argo said that it has been facing negative attention from Nasdaq since its stock price traded under $1 for 30 consecutive days in a row. If the company fails to get its stock price again above $1 in the next 180 days, it could be at risk of delisting from Nasdaq.
New RNS: we received notice from @Nasdaq as our ADSs have closed below $1 for 30 trading days
We have 180 days to cure this deficiency
No impact to our operations or LSE listing, and no impact to our ongoing negotiations
Full RNS: https://t.co/Au3txnlkHL
#ARB $ARBK #BTC— Argo (@ArgoBlockchain) December 16, 2022
2022 has been one of the toughest years for Bitcoin mining companies. Some of the top players like Riot Blockchain, Marathon Digital, Core Scientific, Agro Blockchain and Bitfarms have all announced bankruptcies. Amid these developments, the price of ASIC miners has also dropped to multi-year lows.
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Argo Blockchain announced the increasing Bitcoin mining difficulty made it difficult to rake in more coins during the last month.
Argo Blockchain Plc (LSE: ARB; NASDAQ: ARBK) has announced that it is at risk of having insufficient funds to support internal operations. As such, Argo Blockchain is weighing on voluntary Chapter 11 bankruptcy filing in the United States via professional guidance. As the cryptocurrency bear market pushes the mining company to a tight corner, the company announced that operations next month could be hampered by insufficient liquidity.
Argo Blockchain is one of the leading Bitcoin mining facilities, and its collapse could spell more doom for the cryptocurrency market. Moreover, the company controls 2.5 EH/s out of 247.87 Exahashes/s.
A major crypto mining company suffering from a liquidity crisis could mean more related companies are on the brink of significant losses. Nonetheless, Argo Blockchain has indicated that it is in advanced talks to liquidate some of its assets.
“The Company is in advanced negotiations with a third party to sell certain assets and engage in an equipment financing transaction that the Company believes will strengthen its balance sheet and improve its liquidity,” Argo noted.
Notably, the company held 126 Bitcoins as of November 30, 2022, after mining 198 BTC during the month. Argo Blockchain announced the increasing Bitcoin mining difficulty made it difficult to rake in more coins during the last month. As such, fears of possible negative cash flow could lead to operations closure.
“Should Argo be unsuccessful in completing any further financing, Argo would become cash flow negative in the near term and would need to curtail or cease operations,” the company added.
According to on-chain data, crypto mining facilities have been reported liquidating both freshly minted and old coins due to low underlying value. The cryptocurrency market has liquidated over $2.2 trillion in the past twelve months. Whereby the Terra Luna and FTX implosion significantly magnified the liquidations this year.
Per aggregate data from Coingecko, Bitcoin price has dropped approximately 66 percent in the past year to trade at about $17,188 on Tuesday. Ethereum (ETH), on the other hand, is trading around $1,273, down approximately 73 percent in the past year. Not even the merge event sparked a bull market for the Ethereum-based altcoins.
The 2022 cryptocurrency winter has taken down several otherwise profitable companies in the past few years. Notably, most of these companies have reported a significant decline in trading volume, a primary source of income. As such, Argo Blockchain could sell its digital assets at lower prices than it invested in mining operations.
While the company’s stock market continues to trade in some markets, ARBK shares are down over 94 percent in the past year. Notably, Argo Blockchain has a market capitalization of approximately $39.36 million.
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Though the crypto winter seems to be over, its impact on Bitcoin and the crypto market still lingers. Several crypto-related firms have gone down the drain over the pressure in the market. Some are still battling to stay afloat despite the forces’ influence while managing their operations.
Most companies related to Bitcoin mining are getting more heat from the fluctuating market trend. Most Bitcoin miners have shut down businesses, but some filed for bankruptcy as they couldn’t weather the storm.
Argo Blockchain is reportedly facing a negative cash flow, with the value of its shares declining. The pressure is getting more intense for the crypto mining giant in financing its continuous operation. More failures in such financing quests could lead to a halt in its process or a drastic cash drop in the future.
The BTC miner released a press statement disclosing its previous financial plans. It noted how the firm has been exploring diverse economic opportunities. However, it has no concrete assurance in signing such agreements or completing fruitful transactions.
It revealed that the company needs to consummate financial activities offering enough working capital for its operational requirements. Such economic growth is necessary for its sustainability in the next twelve months from today to avoid becoming bankrupt.
According to the press, the firm had a partnership plan with an investor to generate $27 million through shares subscription. However, the attempt came out unsuccessful.
Also, Argo Blockchain reported the sales of some of its mining equipment to preserve cash and enhance its liquidity. For example, it recorded selling about 3,843 brand-new Bitman S19J Pro machines in the firm’s last batch of inventory scheduled for October.
Following the recent downward financial stance, Argo’s shares performance has plummeted. The data indicated a decline of almost 50% over the past 24 hours. Also, the stocks report from the beginning of the year shows a dip of over 80%.
The struggle by Argo has been going on for some time now. Finally, the Bitcoin mining firm got a $25 million BTC-backed loan from Galaxy Digital, an investment management company, in September 2021. The loan targets to support the miner’s cash flow requirements and expansion plans in West Texas.
Argo has been selling its BTC, holding monthly throughout 2022. This move is the necessary option to cut down its part of the agreement and increase its balance sheet. In June this year, the firm sold about 637 Bitcoin at $24,500 per token.
However, it seems to sell more Bitcoin tokens than it has produced. In June, the company mined about 179 BTC but sold 637 BTC coins.
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Bitcoin miner Argo Blockchain on Wednesday said it will take on additional debt to buy equipment for its flagship Texas facility.
The miner entered a series of loan agreements with crypto-focussed lender New York Digital Investment Group (NYDIG), under which the latter will provide Argo with up to $70.6 million in debt. Interest rates on the loans are set at 12%, and will mature in about two years.
The funds will be directed towards Helios- Argo’s flagship mining facility in Dickens County, Texas. Phase 1 of the the site is under construction and is expected to begin operating in the second quarter of 2022.
Josh Burandt, Head of Mining Services at NYDIG said in a press release that the firm intends to grow its partnership with Argo.
Argos said that when completed, Helios will be among the largest “immersion-cooled” Bitcoin mines in the world. To improve server performance and reduce temperature, the firm will immerse its mining servers in a non-conductive coolant.
Argos began constructing Helios in July 2021. The site is set to cost the firm a total of between $1.5 billion to $2 billion.
Phase 1 of the facility will have about 50,000 mining machines, and support 200 megawatts of electricity, Argo said. The site also has access to about 800 megawatts of electricity from a neighboring substation.
Easy regulation, coupled with cheap electricity has seen a slew of Bitcoin miners shift into Texas since last year. The shift also comes after China, once the world’s biggest crypto miner, effectively banned the act last year.
Texas politicians such as Senator Ted Cruz are also largely in favour of having Bitcoin mining in the state. Cruz is a proponent of Bitcoin, and personally holds tokens.
Recently, Electric car maker Tesla entered a partnership to mine Bitcoin with Blockstream and Jack Dorsey’s Block. Tesla head Elon Musk had recently moved the firm to Texas, citing better regulations.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Intel ’s play to get into the bitcoin mining market might end up being the story of the year. In a post titled “Blockchain and the New Custom Compute Group,” Raja Koduri reveals a little of the company’s playbook. At Intel, he’s the senior vice president and general manager of the Accelerated Computing Systems and Graphics Group.
Related Reading | Jack Dorsey’s Block To Democratize Bitcoin Mining With Open Source Mining System
In the article, Koduri says, “we are focusing our efforts on realizing the full potential of blockchain by developing the most energy-efficient computing technologies at scale.” Intel’s play is deeper and harder than previously thought. They’re going all-in in the blockchain business. With a twist that every corporation is claiming for.
“Today, we at Intel are declaring our intent to contribute to the development of blockchain technologies, with a roadmap of energy-efficient accelerators. Intel will engage and promote an open and secure blockchain ecosystem and will help advance this technology in a responsible and sustainable way.”
That’s right, they’re tackling the problem “in a responsible and sustainable way.” And they’re calling the mining chips “accelerators” for some reason. Will the name catch on?
“Intel Labs has dedicated decades of research into reliable cryptography, hashing techniques and ultra-low voltage circuits. We expect that our circuit innovations will deliver a blockchain accelerator that has over 1000x better performance per watt than mainstream GPUs for SHA-256 based mining.”
This new line of Intel products responds directly to the ESG crowd. The bitcoin-consumes-too-much-energy FUD people. Soon enough, they’ll have to face Intel ’s PR machine. How can bitcoin consume too much energy if Intel’s product “has over 1000x better performance per watt than mainstream GPUs for SHA-256 based mining”?
BTC price chart for 02/14/2022 on Kraken | Source: BTC/USD on TradingView.com
We can’t prove it, but, all of these companies probably knew years ago about Intel’s plans to release a bitcoin mining chip. Again, Raja Koduri:
“Our blockchain accelerator will ship later this year. We are engaged directly with customers that share our sustainability goals. Argo Blockchain, BLOCK (formerly known as Square) and GRIID Infrastructure are among our first customers for this upcoming product. This architecture is implemented on a tiny piece of silicon so that it has minimal impact to the supply of current products.”
When NewsBTC analyzed Intel’s chip announcement, we summarized the situation as:
“This could be huge. Intel plans to enter the Bitcoin mining space with a cleverly marketed “ultra-low-voltage energy-efficient” ASIC chip. Considering that the chip shortage severely delayed the next generation of ASIC miners, this is tremendous. And, more importantly, it opens up the door for Bitcoin miners manufacturing in the USA. And in the rest of the Western world, even. ”
After that, we analyzed the situation’s implications:
“Now, the open-source Bitcoin miner that Jack Dorsey’s Block is working on makes a lot more sense. Theoretically, the silicon chip is the only part of an ASIC machine that can’t be bought in a hardware store. With that problem solved, by no less than an industry leader with immense manufacturing power, the sky’s the limit. If this whole thing materializes, expect a huge leap forward in the further decentralization of Bitcoin mining.”
Notice how Block is one of the first clients. And how Intel had the energy-efficient ASIC chip marketing ready from the get-go. And how Koduri even addressed the chip shortage in the last line there.
Reading between the lines, it’s clear that this is not a secondary project for Intel. They have high hopes for this low-energy chips play. Here, Koduri discusses the Custom Compute Group:
“The objective of this team is to build custom silicon platforms optimized for customers’ workloads, including blockchain and other custom accelerated supercomputing opportunities at the edge.
Onward, we aspire to leverage technologies from our zetta-scale computing initiative to deliver energy-efficient solutions.”
Related Reading | Green Energy: In NY, Bitcoin Mining Saved The Oldest Working Hydroelectric Plant
You read it here first, Intel ’s play to get into the bitcoin mining market might end up being the story of the year.
This is not financial advice, though.
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The bitcoin mining firm Argo Blockchain filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for a proposed public offering due November 30, 2026, with an interest rate of 8.75% Senior Notes.
The UK-based firm plans to raise a total of $57.5 million through the Notes sales to the public, offering them in increments of $25. They intend to use the funds for the construction of Argo’s Texas crypto mining facility, which aims to power 90% of operations through renewable sources and is estimated to cost around $2 billion.
Our mining strategy is to cost-effectively acquire and deploy the most advanced mining technology solutions in North American facilities that utilize predominantly renewable and inexpensive power.
The Company will also use the net proceeds “for general corporate purposes” and “potentially acquisitions of, or investments in, complementary businesses” as they are exploring “strategic initiatives in software and other technologies in the wider cryptocurrency and blockchain sectors.”
In connection with the Offering, Argo has applied to list the Notes on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “ARBKL.” If approved for listing, trading on Nasdaq is expected to commence within 30 business days after the Notes are first issued.
The filing states that Argo Blockchain completed its U.S. Initial public offering of 8,525,000 American Depositary Shares on September priced at $15,00 per share, having net proceeds of approximately $114.8 million.
Later in the month, they held 1,836 Bitcoin and Bitcoin Equivalent “valued at approximately £58.7 ($79,5) million based on prices as of such date”, with total revenue of £50.4 ($68,3) million, which translated into a growth rate of 238% “over £14.9 ($20.2) million in the nine months ended September 30, 2020”.
Related Reading | Argo Blockchain Secures $20 Million Loan with Galaxy Digital LP
Argo’s mining revenue rose 32%, a total of $9,75 million in October, having mined 167 bitcoin or bitcoin equivalent, compared to 165 in September with revenue of $7,59 million. The month’s income was generated at a Bitcoin Mining Margin of roughly 84%.
The firm reported a total of 1,646 Bitcoin mined year-to-date and owned 2,128 Bitcoin or Bitcoin equivalent by the end of October. They also announced a mining expansion that comes from adding 220 PH/s to its total capacity, “bringing the Company’s mining capacity to 1.295 EH/s”.
Recently, Argo Blockchain announced they are investing in the construction of an 800-megawatt crypto mining facility in Texas that could cost between $1.5 and $2 billion. It is being built on 320-acre land purchased for $17.5 million.
Questions were raised about Argo’s lack of clarity around the costs of the mining facility, but Argo declared the estimated cost of building and kitting based on “numerous assumptions” and defended the investment.
Our investments in mining facilities are designed to significantly expand our mining capacity and provide us with meaningful control over our mining operations. We are taking these steps as part of a broader strategy to shift our business from contracting for hosting of our mining machines in facilities to owning and operating our facilities.
Related Reading | Bitcoin Mining Vs. The World: BTC Leads Sustainable Energy
Argo Blockchain is listed in NASDAQ Global Market, and its market capitalization is approximately $863 million.
During the six months preceding June 30, Argo Blockchain reported revenue of £31 million, up 180% compared to last year’s first half.
Argo Blockchain PLC (LSE: ARB), a leading cryptocurrency mining company, has reported its H1 earnings results for 2021. According to the interim half-year results for 2021, the company recorded notable gains bolstered by the Bitcoin price pump and increased mining capacity.
During the six months preceding June 30, Argo Blockchain reported revenue of £31 million, up 180% compared to last year’s first half.
Additionally, the company reported its EBITDA for the first half of £16.0 million, reciprocating to a spike of 332% compared to last year’s £3.7 million. The notable spike came in despite a £6.2 million downward revaluation of digital assets coupled with a £1.6 share-based payment charge.
As for the pre-tax profit, the crypto mining company recorded £10.7 million during the first half of 2021, compared to £0.5 million recorded the same period last year.
During the first half, the company mined a total of 883 units of Bitcoin compared to 1,669 units of BTC mined H1 of 2020. The notable difference has been attributed to the Bitcoin halving that reduced the amount of Btc mined per 10 mins thus increasing the mining difficulty.
However, the company has seen its Bitcoin holding grow tremendously since last year’s halving.
“The total number of Bitcoin and Bitcoin Equivalent held as of 30 June 2021 were 1,268 BTC, an increase from 127 Bitcoin and Bitcoin Equivalent as of 30 June 2020,” the company said in the report.
The company continues to invest heavily in Bitcoin mining to capitalize on the rising market prices. Furthermore, institutional investors led by most hedge funds are seeking crypto exposure to hedge against increasing inflation.
Previously, the company had announced an initial purchase of $8 million mining rigs from ePIC Blockchain Technologies. With the delivery expected during the fourth quarter of 2021, both companies have agreed to make changes accordingly.
“Based on limitations of technology, Argo and ePIC have agreed to amend the agreement. Under the amended agreement, the initial purchase order was canceled and, at Argo’s option, $5 million deposited with ePIC, in whole or in part, can be applied to the purchase of ePIC mining machines or ePIC common stock or repaid in full,” the company explained.
Forward, the company continues to invest globally in crypto mining facilities. Notably, Argo Blockchain acquired 160 acres of land in West Texas. On it, the company announced that it is building a new hosting facility with up to 200MW of clean energy at low prices.
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