As part of the ShareBuyers’ going for growth series, we take a look into the growth prospects of Argo Blockchain (LON: ARB), a leading cryptocurrency miner that has been among the best performers across the London markets – gaining nearly 2,700% over a one year period to date.
With an ever-increasing number of big names making moves to integrate Bitcoin into their financial ecosystems – the surging share price of Argo Blockchain comes as no surprise as shares in ARB provides investors with an easy and liquid way to enjoy the upside from the increasing demand for Bitcoin.
Find out why Argo Blockchain Chief Executive Officer Peter Wall feels that this is just the start of an incredible growth journey ahead for shareholders and how we would pitch the business to BlackRock CEO Larry Fink!
For those unfamiliar with Argo Blockchain, can you briefly explain your value proposition and business model?
Argo is the UK’s first publicly-traded cryptocurrency miner, listing on the London Stock Exchange in August 2018 and is the only player in the UK market.
We mine for our own account from established jurisdictions at state-of-the-art facilities in North America with a focus on harnessing our energy from renewable sources. We currently have over 16,000 machines and our SHA-256 mining capacity (mining power) is 787 petahash.
There have been ‘false dawns’ regarding bitcoin and cryptocurrency in the past, why do you feel that this time around it’s different?
The most recent bull run on Bitcoin is fundamentally different to the one we saw in 2017. While Bitcoin and cryptocurrencies have a long way to go until we reach mass adoption, it can certainly be said that we have reached a new phase. Bitcoin turned 12 in January and has been one of the best-performing assets through the pandemic.
This time, we are seeing some of the largest payment platforms such as Paypal, Visa and Square now integrate Bitcoin. Prominent hedge fund managers have also announced they have added additional exposure to cryptocurrencies in the last six months. Last month, the OCC in the U.S. also announced it had approved banks to use digital currencies for transactions and other services and this month, Tesla announced it has invested $1.5 billion in Bitcoin, indicating that we’re moving in the right direction at pace and the use of cryptocurrencies is becoming much more accessible.
The recent surge has been driven by interest, involvement and acceptance by the financial establishment which had, up until 2020, taken a sceptical and critical view of cryptocurrencies. As portfolio managers come round to Bitcoin, this will only drive the price higher, and create a higher floor than has previously been seen. Furthermore, a lot of investors see Bitcoin and other cryptocurrencies as both a hedge against inflation and a long-term store of value. Therefore, short term volatility is not a concern for these types of investors. Many believe cryptocurrencies have a long way to climb and remain an attractive investment.
Argo Blockchain has been on a meteoric rise recently, how do you expect to sustain and continue this growth journey?
We have been extremely happy with the company performance in 2021 so far. Obviously the price of Bitcoin has been a major factor in this performance, but there have also been other forces at work. Gaining approval to trade on the OTCQB Venture Market in the U.S. was a major milestone for us, and has enabled us to broaden our investor base and enhance our visibility in North America where there is a broader adoption of cryptocurrencies. We will continue to actively look at all opportunities to generate growth and deliver meaningful returns to our shareholders and are excited for 2021.
We have also recently announced our intention to purchase land to build a new 200mw mining facility in Texas, with access of up to 800mw of electricity long-term at one of the cheapest rates in the world. This will significantly increase our mining capacity and allow us to upscale the size of the business within the next 12 months while keeping our costs lean.
What are the challenges you anticipate on your growth journey and how do you expect to overcome them?
At Argo, we have encountered a number of challenges, including our first Bitcoin halving and pivoting from a consumer-facing business to mining for our own account. However, when growing our mining operations, efficiency, stability and value to shareholders have always been central to our decision-making and these will continue to be our guiding principles.
One of our key aims was to focus on efficiency so that we can get the best out of all our machines, and this strategy has put us in an extremely competitive position to capitalise on the current market conditions. We are significantly more efficient than our competitors, and this has resulted in us delivering our best revenues to date in January 2021.
In addition, lack of regulation and openness are two common critiques of the crypto sector. We have sought to address these, firstly through our listing on the LSE, meaning we are governed by the listing authority to give investors the confidence to gain exposure to the sector. Secondly, we provide monthly updates for our shareholders where we publish our revenue, number of coins mined and our mining margin each month. We pride ourselves on bringing transparency to the sector and it has meant we have been able to cultivate excellent relationships with our shareholders, both on the retail and institutional side.
Imagine you find yourself in a lift with Larry Fink. What would be your ‘elevator pitch’ to summarise why BlackRock should invest in Argo Blockchain right now?
Bitcoin and cryptocurrencies will play a major role in the future of the world’s financial system. Argo is a blockchain technology company that is not only one of the world’s biggest and most efficient miners of Bitcoin, but is also diversifying into other projects in the cryptocurrency ecosystem. We see Bitcoin as the best asset in ensuring a long-term store of value, and other cryptocurrencies are already showing they have real, practical uses – and we’re still only in the early stages of the sector.
Argo provides accessibility and exposure to cryptocurrencies for people without the technical knowledge, capital or space to mine, hold, or invest in cryptocurrencies themselves. With recent forecasts from JP Morgan suggesting Bitcoin could top $140,000, and the recent news that Tesla has invested over $1.5 billion into the digital currency, confidence and investment in the sector is growing exponentially.
As an established miner, Argo has capitalised on this investor interest, becoming one of the most searched for stocks in January of this year and we have also seen our share price soar, increasing by over 2000% in less than six months.
Please note: this discussion with Peter Wall of Argo Blockchain forms part of the ShareBuyers’ going for growth series – helping companies with high growth potential to share their story and expected prospects.