Argo Blockchain Posts 10x Increase in Mining Profits in 2019
Agro Blockchain, the LSE (London Stock Exchange) listed mining firm, reported a 10x rise in revenue for 2019 in the past year. The company’s stock price surged as Agro Blockchain intends additional expansion in the forthcoming year.
Agro Blockchain PLC operates mining rigs on a commercial basis, in addition to providing Mining-as-a-Service (MaaS) to institutional investors who are “looking to hold specific coins but do not want to procure via exchanges.”
The London based company has its mining facility in Quebec, capitalizing on the region’s low cost hydroelectric power.
In its trading activity report, the firm has stated that it anticipates revenues of £8.5 million ($11 million) for 2019, an increase of 10x from 2018’s profit of £760,000 ($987,000), in spite of a considerable decrease in the final quarter of the year as markets came saw a bit of profit booking.
The company generated 432 Bitcoin (BTC) in its operation, compared with 426 in Q3 2019. However, its revenue declined from £3.63 million ($4.7 million) in Q3 to £2.66 million ($3.45 million) in Q4, mainly due to a drop in cryptocurrency prices, “increased mining difficulty,” and adverse Forex rates.
Mining margins, reflecting net profit after deducing the cost of generation of cryptocurrency, remain strong at 52% in Q4 2019, in spite of a decline from 73% in Q3.
The company is determined to expand its operation in a considerable manner, after doubling its mining rigs this year. The objective of the company is to attain 17,000 mining rigs by the end of first quarter of 2020. Majority of Argo Blockchain’s mining power is utilized in rigs for Bitcoin mining.
As the Bitcoin halving is scheduled to happen in May, the mining sector is under pressure from a 50% decline in rewards. Bitmain, a leading producer of mining rigs, has already trimmed its employee count by 50% ahead of the Bitcoin halving event.
Even though Argo asserts to have “one of the highest efficiency rates in the market,” the halving event is perceived as an event of great uncertainty.
Decline in revenue due to Bitcoin halving event could be offset by appropriate rise in the price of Bitcoin, as many analysts have pointed out that halving is yet to be priced by the market. Nevertheless, contrarians believe that halving event will not have any impact on price.