Argo Blockchain Share Forecast September 2021 – Time to Buy ARB?

Shares of the publicly traded blockchain technology company Argo Blockchain PLC (LSE: ARB) are in the red today, after closing at 142p on September 23rd (19:38 UTC+1). Despite the steady growth in the share prices recently that peaked at 173p on last Friday, ARB has faced a sudden dip of -9.55% yesterday. This sudden volatility can be due to the unpredictability in the crypto prices; nevertheless, it still raises the question of whether ARB is worth investing or just another high-risk investment at this moment. Let’s find out.

Argo Blockchain – Technical Analysis

According to the financial statement from Argo Blockchain, the market cap of the software company is at £648.702 million with total assets worth £139.708 million. Total revenue for 2020 was £18.96 million, compared to £8.62 million a year ago.

Moving averages for ARB such as Exponential Moving Average (10)(149.4), Simple Moving Average (10)(152.2), Exponential Moving Average (20)(145.4), and Simple Moving Average (20)(144.6) are pointing towards selling. Oscillators such as Relative Strength Index (14)(47.0), Stochastic %K (14, 3, 3)(41.0), Commodity Channel Index (20) (−47.4), and Average Directional Index (14)(17.8) are, on the other hand, neutral.

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Recent Developments

Galaxy Digital LP has recently increased the company’s credit capacity by $25 million to $45 million. Initially, it was reported that Argo had secured a $25 million loan from Galaxy Digital LP, an established lender. Last week, however, the company also announced that it has sold 7,500,000 American Depositary Shares in preparation for its NASDAQ debut. If the listing is authorised, it will raise around £100 million, significantly reducing its debt.

Argo has, nevertheless, taken on debt in order to endorse expansion; for a growing share, this is often a positive indication. The company intends to utilise the funds to start building a new facility in Texas. This latest facility will be powered by renewable energy and, with the probability of accepting Bitcoin to purchase Tesla cars in the future, the investment may pay off highly.

All of this should strengthen Argo’s financial profile and put the company on a strong development path in the coming quarters. On the operational aspect of the company, Argo mined 206 Bitcoin or Bitcoin Equivalent (BTC) in August, producing £6.8 million in profits.

Should You Buy Argo Blockchain Shares?

The latest expansion plan has been gathering huge quantities of funds to support the establishment of the new mining facility in Texas, as well as seeking an initial public offering in the United States. The forthcoming Argo Blockchain IPO is expected to raise over $138 million, as per varying forecasts. Considering the recent volatility in the cryptocurrency market, this IPO has become an eagerly anticipated offering. Investors that are optimistic about the crypto market’s long-term trajectory, on the other hand, are paying attention to miners as a method to acquire even more leverage in this move.

However, the company’s prospects as a Bitcoin miner are directly connected to the cryptocurrency’s value. As a result, if the asset’s price plunges, Argo’s sales and earnings may suffer as well. Because its debts are secured against its Bitcoin holdings, it may have problems with lenders.

This is, without a doubt, Argo’s foremost significant risk at the moment. But keeping the possible risks in consideration, it is safe to believe that the benefits now exceed the drawbacks. Certainly, a slump in the economy is a possibility. However, the new share offering should provide enough capital for the business to survive any market downturns. Hence despite the vulnerability, ARB can be viewed as a speculative investment that focuses on its possibilities for development and recent accomplishments.

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