What is Cryptocurrency?
Cryptocurrency is a virtual or digital currency based on the encryption techniques to regulate the production of units of the currency and substantiate the exchange of funds. It is also dubbed as digital asset originated to work as an exchange medium that uses cryptography to shield financial transactions and manage the production of additional units. It is different from the fiat currency, as the government of states backs fiat currencies and a central authority controls it, but crypto-currency is not backed by any government, and no central authority is there to control it, being run on the basic principles of cryptography.
Cryptography is a method of shielding data and information and converting it into codes so that only those for whom the data is meant for can access, read and process it. In the arena of computer science, cryptography defined as the process of shielding information and communication through derived mathematical techniques called as “algorithms”, which converts the message or data in ways which are tough to interpret.
Let’s understand Cryptomining?
Mining of cryptocurrency is a process in which miners try to solve complex mathematical equations and collate recent transactions into the block through the use of powerful computers. The blocks that store data of all previously executed transactions on the network and are synchronised together by cryptography on a decentralised public ledger, which is known as “block chain”. The miners are then rewarded for their intensive work through the payment of a cryptocurrency.
Argo Blockchain Plc and its work
London, the UK-headquartered Argo Blockchain Plc is engaged in providing mining services for cryptocurrency. Its Miners get to mine cryptocurrencies like Ethereum and other altcoins from their computer and mobile device through this platform. The group offers a cloud-based platform called Mining as a Service (MaaS) where users to can onboard and manage the blockchain mining rigs and can-do mining of cryptocurrency. As on August-03-2018, its shares got listed on the main market of the London Stock Exchange for trading. The outstanding market capitalisation of the company stood at £27.91 mn, which ranks it among the small-cap companies listed on the main market of the London Stock Exchange.
Institutional Investors in Argo Blockchain
Banque Heritage SA, Miton Asset Management Ltd., Hadron Capital LLP, Jupiter Asset Management Ltd., Trium Capital LLP, Hargreave Hale Ltd., Schroder Investment Management Ltd., Banca Credinvest SA (Investment Management) and Henderson Global Investors Ltd. are the major institutional shareholder in the Cryptomining service provider. Institutional investors own approximately 35.57% of the Argo Plc as on date.
Mike Edwards- Executive Chairman of Argo Blockchain Plc
Mike Edward is carrying 20 years of experience in launching and investment in the technology companies, he is known for investing in technologies companies headed by smart people with great ideas and help them to thrive. His past investments in companies like Punch’d, which was later acquired by Google, Summify- which got taken over by Twitter, Wander – which was later sold to Yahoo and many other successful investments like AreaConnect, Wylie Interactive and PasswordBox- which was bought by Intel. He has ploughed investments in more than 40 start-ups.
At Argo, he is destined as company president and in charge of crafting and executing business operations including mining, software development and all marketing.
Recent Developments at Argo
The enterprise-scale crypto mining services provider- Argo, in the exchange filing, notified the bourse regarding massive capacity expansion to strengthen its mining operations for Bitcoin. The group mentioned that it has ordered 5,000 Antminer S17s for a total consideration of US$13.09 mn, out of which half of the amount was being discharged immediately, and the outstanding amount would be rendered five days before shipment. The transaction is financed from a combination of cash and cryptocurrency mining assets. The company also recorded that they expect to produce 161 Bitcoin or crypto money of £1.38m.
It also mentioned that delivery of the order is expected to be completed by the beginning of November and it will complement their existing installed base of 7,025 machines. Post installation of the new hardware, its total Bitcoin mining capacity will surge approximately 129% to 505 PH (petahash).
By the end of the third quarter of the current financial year, the group’s Bitcoin mining capacity would reach 220 PH, when it collects the announced 2,500 machines. The group also mentioned that, at the current Bitcoin price of US$ 11,352, the return on investment on the Argo’s existing S17 is around 4.5 months.
Argo’s Q2 FY19 mining performance exceeded expectations, in another company filing made by the group, as on July-02-2019, it recorded that mining yield from current hardware in operation has increased in line with a sharply rising Bitcoin price, which has surged approximately 24% since erstwhile operational update recorded as on June-03-2019. As of June-30-2019, it also expects to produce £1.38m of crypto money or 161 Bitcoins in June based on a Bitcoin price of US$ 10,817.16. The reported growth is approximately 101% from the Argo’s May mining outcomes and pegs around 81% mining margin, establishing Argo as one of the most competent miners in the market.
As on June 30, 2019, the company had approximately £3.07m in crypto assets on its statement of financial position, based on the prevailing crypto assets prices at US$10,817.16.
Financial Performance – FY18
During the year under review, the company recorded a revenue of £0.76 mn, indicating the start-up of mining services in mid-2018. Finance costs stood at £0.009 mn, while operating loss during the year ended December 31, 2018, was recorded at £4.14mn. Pre-tax loss during the period under consideration stood at £4.11m, and total comprehensive loss attributable to the equity shareholders of the company stood at £4.11mn. Basic and diluted per share loss was at 2.2pence.
During the year under review, Group’s net cash outflow from the operating activities was recorded at £5.23mn, net cash outflow from investing activities stood at £3.8mn, and Net inflow from financing activities was at £25.48mn (proceeds of share issues). Cash and cash equivalents of the company as on December 31, 2018, stood at £16.38mn, respectively.
Post balance sheet events
As on January 08, 2019, Argo’s 100% owned subsidiary Argo Blockchain Canada Holding Inc changed its name to Argo Innovation Labs Inc, and as on January 14, 2019, Argo Mining Ltd changed its name to Argo Innovation Labs Ltd.
Daily Price Chart (as on July 09, 2019), before the market close. (Source: Thomson Reuters)
At the writing (as on July 09, 2019), shares of the ARB were quoting at GBX 9.6 and added 1.05 per cent against the previous day closing price. Since listing of Argo’s shares as on August-03-2018, it has registered a 52w high price of GBX 17.40 (as on August-03-2018) and a 52w low price of GBX 2.55 (as on February-12-2019). At the current trading level, shares of the ARB were quoting approximately 44.82 per cent below the 52w high price level and 276.47 per cent above the 52w low price level, which indicates that the stock is in a strong bull run and carrying potential to move up from the current trading levels.
Price Performance (%)
On a year-to-date basis, the stock has surged by about 145.16 per cent, and in the past three months, the stock has gained approximately 192.31 per cent.
Also, in the last one month, the stock has ended 13 times up, 7 times down and 1 time remained unchanged against its respective previous closing prices. It reflects an uptrend in the stock and one month Up/down ratio in the scrip stood at 13/7 or 1.8x.
The 5-day average daily volume in the stock was approximately 64.15 per cent above the 30-day average daily shares traded on the London Stock Exchange. However, in today’s session, total volume in the stock (before the market close) stood at 1,035,289 with 22 trades took place in the stock.
Simple Moving Average (SMA)
From the SMA standpoint, shares were quoting considerably above its 200-day, 60-day and 30-day SMA prices, which is a bullish technical indicator and carries a decent potential to move up further from the current trading level. As, if a stock is hovering considerably above its 200-day SMA price, it reflects that it is in a long-term uptrend.
The bottom line is, overall prospects in the stock seems to be decent and as per the above discussed technical measure, we assume that it could move up further from the current trading levels. However, 14-day daily RSI in the stock is hovering near an overbought zone.