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During this year’s stock bloody, I’ve avoided sharing cryptocurrencies. However, the signs of an early recovery in the crypto market make me think that now may be a good time to add some crypto players to my portfolio.In particular, I’m watching Argo blockchain (LSE: ARB) stock.
Substantially Bitcoin mining Find out if your company should buy this stock today for its operational and potential use of blockchain technology to diversify its business model in the future.
Bitcoin mining
The bear market in 2022 was cruel to crypto holders, and last month was the worst of Bitcoin for over a decade. Fluctuations in crypto prices are a major risk to the company. Argo blockchain shares suffered during the meltdown and fell by more than 60% this year.
The company owns 1,935 Bitcoins and has more than 44,000 mining machines in Canada and the United States. Cryptographic mining is basically a validation process to verify the authenticity of a transaction between two wallets.
The main incentive for miners is “block rewards” — currently 6.25 coins per block. Due to the fixed supply characteristics of cryptocurrencies, the supply of Bitcoin will gradually tighten until it reaches the hard cap of 21 million coins in 2140.
We’re bullish in the long run … If we didn’t believe in Bitcoin, we wouldn’t have been in the industry, and in the long run we would continue to be valued as an asset and believe it outperforms most other assets. Has been in the last 10 years.
Peter Wall, CEO of Argo Blockchain
Despite its long-term bullish stance, there are signs that businesses are trying to limit downside risk. Last month, Argo Blockchain sold 637 Bitcoins — more than 179 mined.
The company has been using derivatives as a risk management tool since the fourth quarter of 2021. We also recently hired a full-time derivative trader to enhance our internal capabilities.
Carefully monitor whether miners will return to their net accumulation strategy if Bitcoin prices recover sustainably.
Blockchain technology
This year, the company founded Argo Labs, an innovation division. Network participation and strategic diversification are the two main objectives of this new division.
Participation in the network includes infrastructure support, node execution, and participation in innovative projects to generate revenue. The company’s diversification objectives include identifying new crypto projects that it believes have potential for long-term growth. These include NFT and Metaverse projects.
I believe that the digital asset ecosystem offers significant opportunities beyond the mining industry. It’s encouraging to see Argo Blockchain taking advantage of this possibility. Stocks maintain a high correlation with cryptocurrency prices, but in my view, diversifying revenue streams in space is not a bad thing.
Need to buy Argo Blockchain stock?
I think Argo Blockchain shares a risky investment. So I’m not going to put a lot of spare cash into the company, but I would like to gain exposure to the crypto sector. If the crypto market continues to recover after the recent positive momentum in Bitcoin prices, I think it is possible that stock prices will rise.
The company has a higher mining margin than many competitors, including: Marathon Digital Holdings When Riot blockchain.. In addition, a credible approach to diversification planning and risk management makes investing in equities more attractive to me. I will buy it today.
The content of this article is provided for informational purposes only. No form of investment advice is intended or structured. Bitcoin and other cryptocurrencies are highly speculative and volatile assets and carry some risks, including the total loss of money invested. Readers are responsible for conducting their own due diligence and seeking expert advice before making an investment decision.
