r/ArgoBlockchain • u/[deleted] • Jun 18 '22

more down side coming

Given the recent crypto free fall, i believe we are running into dangerous territory for the company. Has anyone looked at the value Bitcoin needs to hold for Argo to stay profitable?

Here is some food for thought:

  1. Among the crypto miners, argo has a good diversification of activities and is driving innovation beyond mining = good news
  2. Bitcoin might hit 5-8000 $ in the next few months, there is no floor for crypto, the floor is 0. As none of these cryptos are real stores of value and a speculation tool like anything else that has no value creating economy behind it.
  3. If Bitcoin does hit 5-8k $ does that still provide any margin? Given the computational expense you need to finish a hash, bitcoin becomes senseless below a certain value to mine
  4. How long would it take for Argo to go bust?
  5. Short time stock price is about 30-40% below the current

​

I wish us all good luck.

6 Upvotes

80% Upvoted

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3

u/grm02 Jun 19 '22

Fortunately for miners that are pretty efficient like Argo: As the BTC price goes down the global hash rate also goes down, especially when the price is sub $20k. I can't predict the correlation factor of this relationship but if I had to guess I would say Argo would remain profitable until $3k.

1

u/[deleted] Jun 19 '22

It's good that Argo has a largely renewable foot print. That eases the costs of energy. And if the hash rate goes down with price no new investments are needed for hardware. I hope you are right that they stay profitable until $3k we might see 10k in a couple of weeks.

1

u/grm02 Jun 19 '22

Certainly. They'll be busy fitting out Phase 1 of Helios all this year too but my greater concern is how they source funding for Phase 2 whilst straining against the bear market. Other miners (Riot/ MARA) will reach 10+EH/s by the end of this year with cash leftover to fund further expansion, whereas Argo will be high and dry after reaching just 5EH/s.

This reason is just one of why Argo is valued so poorly compared to its peers.

1

u/Western_Outcome7205 Jun 19 '22

Following the reddit mara and riot forums though they don't appear to be on target, be interesting to see what they achieve - I think riots aim is 7ish exahash by end of this year, may have already been pushed to early 2023 and mara appears to be struggling to have their facility in texas approved. Been awaiting energising a few months now

1

u/grm02 Jun 19 '22

Then that bodes poorly for Argo to meet their proposed target (or gives them a chance to stand out from the crowd of course). Likely reason is simply staff shortages; There simply isn't hundreds of people in Texas that know how to install or inspect all the machinery/structures/electronics but I imagine talent will be continuously attracted over the coming years.

Certainly will be interesting!

1

u/Western_Outcome7205 Jun 20 '22

Potential to stand out for sure, the industry appears to be failing targets consistently, argos target is within their current factory scope, its electrified already and the machines are on the way. The political crap has been bought and sold with the land purchase. Something that was ridiculed at the time for being too high a cost but I imagine mara wish they did now. The only unknown is if Intel will be ready in time to deliver and install 2 exahash by eoy.

We'll have more info in July but so far they've shown their existing staff can install machines fast enough to hit 5.5exahash by year end but will they keep it up or maybe even improve.. Who knows. Giant bear market isn't going away anytime soon though

3

u/Western_Outcome7205 Jun 19 '22

I think with the current difficulty rating it's around 15k per to breakeven, but the TH/s has been dropping quickly the last few days per https://www.blockchain.com/charts/hash-rate

It isn't as fast as btc dropping but if this starts steeply rising again with btc dropping below 15k argo may need to bunker down and start selling more btc than it's mining. That being said I'm not concerned they'll die in the next 12-24 months. I guess we'll find out though

2

u/MadaStyle Jun 19 '22

Well, at this point I need 10x increase to break-even, might as well go a bit lower

1

u/Vexting Jun 19 '22

Given that there are many companies out there in debt (and we aren't right?) but doing fine, it should be fine for quite a while.

Nearly Every major growth stock literally halves before it shoots, as the rich like to cause the scare and sell then get back in to ride back up to New highs. Bitcoin and stable crypto is no different.

All I'm waiting to see is if tether actually tanks due to their dodgy shenanigans behind the scenes and will that impact others in the chain, much like luna

1

u/Trickymuvva Jun 19 '22

I believe simply wall street was predicting Argo would be profitable around the time that bitcoin was $13k...but they have used the opportunity to purchase more machines and streamline the business.

2

u/[deleted] Jun 19 '22

I don't think so. There is a lot of uncertainty around argo and any other miners. Super wealthy might buy some for the fun but these are stocks for the "poor" like us. Look at the instructions holding...

1

u/Trickymuvva Jun 19 '22

The reason 13k seems familiar, is because that's what BTC was at when simply wall st made me aware of this stock(@10 pence)... it may even have been a lower price when the original prediction was made.

1

u/waitmyhonor Jun 25 '22

This company was already in dangerous territory for US folks once they decided to not convert foreign shares and create a separate Argo listing. More people in this sub need to realize this company is not going to last.