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Is Argo Blockchain a good crypto investment?

12/06/2021

In April this year, cryptocurrency Argo Blockchain announced a 120% revenue increase for 2020, with over a 100% return on investment for every single one of its mining machines. “The board looks forward to the future with great confidence”, said Argo’s Chief Executive, Peter Wall – but in a sector that’s notorious for its high-risk levels, is Argo Blockchain a good crypto investment? 

Strong performance in early 2021

It wasn’t just Argo’s 2020 performance that had crypto investors interested. In early May, the group announced an increase in revenues from £6.57mln in March to £6.70mln in April: a fourth consecutive month of both profits and record mining revenue. As a result of their continued success – and with a desire to cement longer-term growth – in early May, the group acquired two data centres in Quebec. The aim, said Wall, was to “seek greater control over our mining production and mining cost base”. For investors, it seemed that all was looking rosy – so is now a good time to invest?

What does Argo’s share price crash mean?

In the last year, Argo’s performance has been strong, with its share price rising by over 2,500%. However, its 300p share price from February has fallen significantly in 2021, including a 7% drop on May 13th alone. 

Some experts give two different reasons for this decline. The first is an announcement by Elon Musk, who questioned the environmental impact of cryptomining, stating that Tesla would no longer accept cryptocurrency as Tesla payment as a result.   

The second is down to the structure of Argo Blockchain, which some believe causes issues when it comes to working out how best to value the company. As a result, Christopher Ruane says, for The Motley Fool, “the Argo Blockchain share price looks to me like it could keep on falling”. 

“Stable Rise Limited is not authorised or registered by the Financial Conduct Authority. The marketing materials are not intended to provide financial advice nor promote any individual financial products.”

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