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Argo Blockchain (LSE:ARB) is a cryptocurrency mining company. A lot of the success of the business is dependent on the value of the coins (e.g. Bitcoin) that are mined. With the Bitcoin price below $20k, some are still optimistic about high returns over the next year. If this happens, here’s where I think Argo Blockchain shares could go.
Why the Bitcoin price matters
As highlighted in the H1 results, Argo mined 939 Bitcoins and equivalent coins during the period. Yet even though this was up 6% on the previous year, the actual financial value of this revenue was lower by 14%. This difference was due to the fall in the Bitcoin price in the interim.
The business does have other ways of growing revenue. For example, increasing capacity with the new facility in Texas. But fundamentally, revenue will always need to be translated from Bitcoin to US dollars for accounting purposes.
For investors, the value of Argo Blockchain depends in part on the financial success of the company. The lower revenue and profits is one reason why the share price is down 70%…
