BTC price drop pushes Argo Blockchain to a loss of $240 million

Block reward mining company Argo Blockchain (NASDAQ: ARBK ) recorded a loss of $240 million in 2022 as the BTC price fell by 70% and the global hash rate shot up.

In its 2022 full-year report, the London Stock Exchange-listed miner revealed a loss of £47.4 million ($58.6 million), with the BTC price drop the biggest headwind for the firm. The digital currency fell from over $50,000 at the start of the year to just over $16,000 last December, amid a wider market contagion that took out some of the biggest players in the industry. This price drop also affected the mining margin, which fell from 84% in 2021 to 54% last year.

The BTC mining industry was also affected by an increase in the global hash rate, which consequently led to an increase in the network’s mining difficulty. Impairment of assets and rising power prices in Texas, where Argo primarily operates mining operations, contributed to the company’s problems.

While Argo had a bad year, most of its peers fared much worse. Some, like Core Scientific (NASDAQ: CORZW ) and Compute North, were hit hard by the ‘crypto contagion’ and filed for bankruptcy after defaulting on their loans. Those who survived were forced to take extreme measures, with the analysis firm Messari revealing that public miners sold 100% of their BTC reserves, a shift from the HODL culture they have always promoted.

Argo would have been one of the casualties had it not been for Galaxy Digital, the Mike Novogratz-led investment firm. Galaxy bought Argo’s mining facility in Dickens County, Texas, for $65 million last December and provided a $35 million refinancing loan to the miner. This allowed Argo to reduce its total debt to $76 million.

“After navigating challenging market conditions in both the crypto sector and the global economy in the second half of 2022, Argo has emerged stronger and in a much more solid financial position,” commented Seif El-Bakly, Argo Blockchain Interim CEO.

El-Bakly, a former COO, took over the helm in February after Peter Wall resigned.

While the Argo received a lifeline from the Galaxy, it still has other fires to put out. This includes a lawsuit in January in which investors claimed the company’s IPO was “negligently prepared” and omitted critical information.

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