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Argo Blockchain share price forecast: Can ARB stock weather crypto’s existential crisis and the BTC downturn?

By Nicole Willing

Edited by Valerie Medleva

11:38, 21 November 2022

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ARBgb
Argo Blockchain plc
0.1610 USD
-0.0025 -1.570%
BTC/USD
Bitcoin / USD
23618.65 USD
555 +2.410%

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In this photo illustration the Argo Blockchain logo seen displayed on a smartphone screen
Argo Blockchain saw its share price losing more than 90% YTD. Where to next? Photo: rafapress / Shutterstock

UK-based cryptocurrency miner Argo Blockchain (ARB) has seen its share price plunge by 91.67% year-to-date, as cryptocurrency prices have fallen, reducing the company’s revenues. A £24m financing deal fell through at the end of October.

Will the company survive the crypto market turbulence? Is there potential to make gains from buying the dip in the ARB share price? 

Let’s look at the stock’s recent performance and the potential long-term outlook.

What is Argo Blockchain?

Argo Blockchain is an enterprise-scale provider of cryptocurrency mining and smart contract services. The company aims to provide "accessible" cryptocurrency mining through a subscription service. To limit the environmental impact from mining, Argo focuses on using renewable electricity to support the growth of blockchain technologies.

The company was founded in 2017 by technology entrepreneur Peter Wall, who serves as its CEO, and Mike Edwards, who was executive chairman until January 2020, when he left to focus on his role as CEO of Pioneer Media Holdings.

Argo was listed on the London Stock Exchange in a £25m initial public offering (IPO) in August 2018, in the first public listing of a cryptocurrency firm on the exchange. The stock was priced at £0.16 a share, giving the company a valuation of £47m. 

In September 2021, Argo listed 75 million American Depositary Shares (ADSs) on the Nasdaq Global Market priced at $15 under the ticker ‘ARBK’, raising $112.5m.

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ARB share price plummets in bearish crypto environment

ARB share price chart

The Argo share price has fallen from its peak of £2.82 in February 2021, when the crypto market rally took off. But while the stock followed the pattern of crypto volatility, it did not keep pace with the extent of the bitcoin (BTC) market’s gains, with the stock trading up to £1.73 in September and £1.44 on 12 November, after bitcoin traded at an all-time high above $68,000 on 11 November. 

Argo announced in July 2021 that it started construction of a bitcoin mining facility in Texas. However, the share price came under pressure as investors became concerned about the cost of the facility. In August 2021, short seller Boatman Capital warned investors: “We believe that Argo Blockchain purchased land in Texas seemingly for up to 100 times more than the acreage is worth, raising serious governance questions about why this deal was done and who benefited.

“We are particularly concerned that nine of the beneficiaries from this deal appear to be Argo shareholders. We are also concerned that an apparently unreported multi-million dollar legal dispute between Argo and Celsius Network could threaten future bitcoin mining capacity and revenue. Argo leases about 40% of its mining fleet from Celsius.”

An insider revealed that the facility could cost $1.5bn to $2bn, which the company subsequently confirmed in a statement on 5 November. 

The stock ended the year at £0.98 and has since been in decline amid cryptocurrency market turmoil. The share price halved by May 2022 to £0.50, when Argo started bitcoin mining at the Texas site, as a strong US dollar and the collapse of the terra luna cryptocurrency caused turmoil on the markets.

Argo stock fell to £0.30 in mid-June before turning higher and trending up towards £0.50 in mid-August, when the company reported higher BTC mining revenue and the completion of a machine swap with Core Scientific. There was also a more favourable risk-on environment across the broader financial markets.

But the share price fell after Argo announced a 14% decline in revenues in the first half of the year from the first half of 2021 to £26.7m, “driven primarily by a decrease in Bitcoin price and an increase in the global hashrate and associated network difficulty level.”

In addition, the company revised its hashrate capacity guidance to 3.2 EH/s by the end of 2022 and 4.1 EH/s during the first quarter of 2023, noting:

LUNC/USD

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+1.290% 1D Chg, %
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Overnight fee time 22:00 (UTC)
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ETH/USD

1,620.99 Price
+3.250% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 22:00 (UTC)
Spread 5.50

BTC/USD

23,618.65 Price
+2.410% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 22:00 (UTC)
Spread 66.00
“We have worked closely with ePIC and Intel to modify the machine design to increase total mining efficiency, which has delayed our expected deployment schedule. Further, we are preserving our optionality by reducing our overall capital spending on these machines as market conditions remain volatile. We remain confident in the performance of the custom machines and are excited to deploy them starting in Q1 2023."

The share price continued to decline during September and on 11 October, Argo reported a decrease in BTC mined in September to 215 bitcoin or bitcoin equivalents, from 235 BTC in August. The decrease was primarily due to a 12% increase in the Bitcoin blockchain’s average network difficulty during September, and the company continued to curtail operations at the Texas facility during periods when electricity prices were high.

The ARB share price dropped from £0.36 in early October to £0.14 on 13 October. While the price bounced from £0.11 on 21 October to £0.21 on 26 October, it was unable to hold the gain and dropped to a fresh low of £0.07 on 2 November. The stock has since ranged between £0.07 and £0.08 a share. Cryptocurrency prices have come under renewed pressure in November from the rapid collapse of the FTX exchange.

On 7 October, Argo had announced plans to sell 3,400 mining machines for cash proceeds of £6m and to raise £24m via a proposed share subscription with a strategic investor. But on 31 October, the company stated that the deal had fallen through and it was “continuing to explore other financing opportunities”. The company added that it had sold 3,843 new mining machines for £4.8m in cash.

On 8 November, Argo announced that its mining revenue in October amounted to £3.55m. That was down by 51% from £7.24m in October 2021. Argo mined 204 BTC in October, down from 215 BTC in September, as the Bitcoin network difficulty continued to increase.

The lack of financing and falling cash flow has raised questions about Argo’s long-term future.

“While Argo is exploring other financing opportunities, there can be no assurance that any definitive agreements will be signed or that any transactions will be consummated. Should Argo be unsuccessful in completing any further financing, Argo would become cash flow negative in the near term and would need to curtail or cease operations,” the 31 October statement said. 

“The Company is endeavouring to complete such financing transactions to provide the Company with working capital sufficient for its present requirements, that is for at least the next twelve months from the date of this announcement.”

Where do analysts see the stock trading in the future? What do some of the latest Argo Blockchain share price predictions indicate?

Argo Blockchain share price forecast: Will the company survive over the long term?

At the time of writing (21 November), the average 12-month ARB share price forecast from two analysts was £0.0730 per share, with one rating the stock a ‘buy’ and the other giving it a ‘neutral’ rating, according to Investing.com. That would see the share price little changed from the current £0.075 level. 

The Argo Blockchain share price forecast from algorithm-based forecaster Wallet Investor at the time of writing projected that the stock could fall from £0.08939 to £0.0559 in December and then drop further from £0.01 to £0.0000212 in May 2023. Wallet Investor’s Argo Blockchain share price forecast for 2023 indicated the stock could effectively fall to zero by the middle of the year.

However, the Argo Blockchain share price forecast for 2025 from AI Pickup showed the stock rebounding to an average of £6.806, from £0.7553 in 2023.

In the meantime, according to data compiled by MarketBeat, Nasdaq-listed ARBK stock forecast targets have ranged between $8 from HC Wainwright on 26 August to $3 from Barclays on 10 October. On 1 November, analysts at Jefferies Financial and Canaccord Genuity downgraded the stock from buy to hold, while analysts at Stifel Nicolaus downgraded their rating from hold to sell. The ADS price closed at $0.82 on 18 November.

The Argo Blockchain share price forecast from Gov Capital for the company’s ADS stock estimated that the price could drop to zero as soon as December 2022.

If you are looking for an Argo Blockchain share price forecast to inform your trading strategy, it’s important to remember that the high volatility on the cryptocurrency and stock markets makes it difficult for analysts and algorithm-based forecasters to come up with accurate predictions on the future of the share price. 

We recommend that you always do your own research. Look at the latest market trends, news, technical and fundamental analysis, and expert opinion before making any investment decision. Keep in mind that past performance is no guarantee of future returns. And never invest money you cannot afford to lose.

FAQs

Is Argo Blockchain a good stock to buy?

Whether ARB is a suitable stock for your portfolio depends on your risk tolerance, trading strategy and how much you intend to invest, among other factors. Always make sure to do your own research.

Will the Argo Blockchain share price go up or down?

The direction of the ARB stock price will likely depend on the bitcoin price, as well as whether the company can generate sufficient liquidity to continue its operations, among other factors. Keep in mind that past performance is not a guarantee of future results.

Should I invest in Argo Blockchain shares?

The decision as to whether to invest in ARB is a one that only you can make. You should do your own research to take an informed view of the market.

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