- The cryptocurrency miner uses the proceeds for general corporate purposes
- The FCA recently reported concerns about the cryptocurrency market
Cryptocurrency Miner Argo blockchain (ARB) raised £ 22.4m through a private placement just days after Bitcoin produced a reminder of its inherent volatility, and passed the $ 40,000 (£ 29,380) milestone before some of its gains were tracked.
Argo, which was listed in London in the summer of 2018, announced on January 18 that it would issue 28 million shares at 80p each to certain institutional investors who had already subscribed to the offering.
The group plans to use the net proceeds “for working capital and general corporate purposes”. This included expanding their mining capacity in the first and second quarters of 2021 to bolster installed computing power.
According to Argo, the goal is to “operate an efficient mining infrastructure that supports the continued growth, innovation and functioning of the world’s leading blockchain networks”.
Blockchain refers to the technology that supports the trading of Bitcoin and other cryptocurrencies and eliminates the need for third party banks and traditional financial infrastructure partners. As Argo explains, cryptocurrency mining is “the process of reviewing transactions and adding new blocks to a blockchain ledger”.
Argo’s share price has doubled since the start of the year. However, in line with the value of Bitcoin – the world’s most famous cryptocurrency – this rise has been interrupted by ups and downs. After rising from around 20p on Christmas Eve to an all-time high of 145p on Jan. 8, Argo’s shares have been on a pretty bumpy ride since then – they changed hands at 91p as of the time of writing.
The volatility of cryptocurrencies is one of the reasons for increasing concerns about the risks they pose to ordinary investors. The UK’s Financial Conduct Authority (FCA) warned earlier this month that consumers who choose a high-yielding cryptocurrency should “be ready to lose all of their money”.
However, some might argue that those looking to get into the crypto market are better off looking into “pick and shovel” games – the stocks that facilitate cryptocurrency transactions than the digital assets themselves. Hold on for now 91p.