Block reward mining firm Argo Blockchain (NASDAQ: ARBK) recorded a $240 million loss in 2022 as the BTC price dipped 70% and the global hash rate shot up.
In its 2022 full-year financial report, the London Stock Exchange-listed miner revealed £47.4 million ($58.6 million) in revenue, with the BTC price drop the biggest headwind for the firm. The digital currency dipped 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 dip also impacted the mining margin, which dropped from 84% in 2021 to 54% last year.
The BTC mining industry was also impacted by a rise in the global hash rate, consequently leading to a spike in the network’s mining difficulty level. Impairment of assets and rising power prices in Texas, where Argo primarily conducts mining activities, added to the company’s woes.
While Argo had a bad year, most of its peers had it much worse. Some, like Core Scientific (NASDAQ: CORZW) and Compute North, were hard hit by the ‘crypto contagion’ and filed for bankruptcy after failing to repay their loans. Those that survived were forced into extreme measures, with analytics firm Messari revealing that public miners sold 100% of their BTC reserves, a shift from the HODL culture they have always touted.
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 extended a $35 million asset refinancing loan to the miner. This allowed Argo to reduce its total debt to $76 million.
“Having navigated 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,” Seif El-Bakly, Argo Blockchain Interim CEO, commented.
El-Bakly, a former COO, took over at the helm in February after Peter Wall stepped down.
While Argo received a lifeline from Galaxy, it still has other fires to put out. This includes a January lawsuit in which investors claimed the company’s IPO was “negligently prepared” and left out critical information.
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