The Argo Blockchain (LSE:ARB) share price has risen an incredible 582% year-to-date, and itâs only four months into the year. This follows a 489% rise in 2020. It has been an incredible journey for shareholders, and one that is likely to continue, in my opinion.
Now and again, an exciting new growth company comes along that shows much promise. I think this cryptocurrency miner could be placed in that category.
Is the Argo Blockchain share price too low?
I think Argo Blockchain is among the best Bitcoin miners in the world. Recent weakness in the Argo Blockchain share price could be an opportunity to add more shares to my new 2021â22 Stocks and Shares ISA.
Despite the triple-digit return year-to-date and a recent positive update, the share price has drifted more than 20% lower from its highs in February.
In its most recent update for March, Argo reported that it has mined 165 Bitcoin or Bitcoin equivalent (together, âBTCâ) compared to 129 BTC in February. The total mined in Q1 is now 387 BTC.
Mining revenue increased by 51% in March to ÂŁ6.57m, from ÂŁ4.34m in February. The company experienced its most profitable quarter to date with total revenues of ÂŁ13.4m for Q1. Business momentum has continued to increase with mining revenue increasing 52% from December to January, and 75% from January to February.
In the words of Chief Executive Peter Wall, âThese numbers are incredibleâ. I agree! Itâs even more impressive that mining margin increased to 84% in March. Margins also grew month-on-month, from 81% in February, and 71% in January.
Not for the faint-hearted
At the end of March, Argo held 764 BTC. The nature of the business makes it particularly reliant on the underlying price of Bitcoin. After a doubling in the price of Bitcoin this year, it has more recently stalled.
As a highly speculative instrument, the underlying price of Bitcoin can be volatile and difficult to predict. Like all cryptocurrency miners, Argo Blockchain is a higher-risk stock. And although I do own some shares, it forms just a small part of my portfolio.
In recent months, the Financial Conduct Authority (FCA) even warned investors on the financial risks of owning cryptocurrencies. However, there have been some high-profile transactions, including a $1.5bn purchase by Tesla.
In addition, there are technology risks. Argo will need to keep up with technological requirements over the coming years. The useful life of a Bitcoin mining computer could be three years so the company will need to invest to prolong efficiency.
A cryptocurrency miner wonât be for everyone. And the strength of the Argo Blockchain share price might put off value investors. But overall I believe Argo is an efficient miner focused on smart growth, and run by an entrepreneurial management team. Itâs also innovative and recently announced plans with DMG Blockchain Solutions to launch a Bitcoin mining pool completely powered by clean energy.
With the recent dip in the Argo Blockchain share price, Iâm tempted to add a few more shares to the speculative part of my portfolio.