Publicly traded Bitcoin miner Argo Blockchain saw its production drop significantly in December due to winter storms in Texas. On Wednesday, January 11, the miner released production figures for the first time since selling its largest mining facility, Helios, to Mike Novogratz’s Galaxy Digital. Argo Blockchain generated 147 Bitcoin in December 2022, a solid drop from November 2022’s 198.
A small reserve
Mining 147 Bitcoin in December means Argo Blockchain currently has a small balance of 141 Bitcoin. The total revenue for the last month of 2022 was $2.49 million. However, that’s nothing compared to the company’s mountain of debt, which now exceeds $79 million. This is offset by $20 million in cash reserves. So, all in all, it cannot be said that Argo Blockchain is a healthy business.
That doesn’t change the fact that they still exist and Bitcoin has now started a secret renaissance. Bitcoin is only up a few percent right now, but every bull run has to start somewhere. The only thing that can save parties like Argo Blockchain in the long run is another bull run. At present it is difficult to find convincing arguments for this. Basically, the film is not good at this point.
Unfortunately for Argo Blockchain, it wasn’t just the winter storms that hit bitcoin prices last month. A massive snowstorm hit Texas last month, forcing many miners to shut down their machines. Among those miners was Argo Blockchain.
In late December, the US Department of Energy spoke about a rush, because there was a power shortage in Texas due to the blizzard. The extremely low temperatures, combined with strong gusts of wind, created a huge demand for electricity on the Texan energy grid.
To save that power grid during these critical moments, Bitcoin miners have contracted with authorities to shut down their machines during these emergencies. If they do, more power will flow to locals. For example, in Texas, Bitcoin mining helps stabilize and strengthen the power grid.
Eventually, problems piled up on Argo Blockchain. Low bitcoin prices, a Texan winter storm and high energy costs forced the company to take action. That move Resulted on 28th December Selling Helios to Galaxy Digital. Helios Argo used to be Blockchain’s largest mining facility, but now belongs to Galaxy Digital’s portfolio.
The purpose of the transaction was to improve the liquidity position of the company. The transaction will reduce total debt by about $41 million and give the company some breathing room to move forward. Despite the sale, Argo Blockchain continues mining at the Helios facility. Basically they now manage it for Galaxy Digital.
The company’s total hashrate (computing power) is still 2.5 exahash per second. As for the rest of the mining industry, it is believed that the situation will soon change for Argo Blockchain. Otherwise, it is very possible that many of these listed players will be in even bigger trouble.