Bitcoin miner Argo Blockchain‘s (LSE: ARB) share price has more than halved in value from where it stood back in February. That’s despite yesterday’s estimate from the Financial Conduct Authority that cryptocurrency continues to attract new investors. Roughly 2.3 million adults in the UK now hold Bitcoin and the like.
So, why is Argo Blockchain’s share price down?
The behaviour of Argo Blockchain’s share price looks even odder when one considers the progress made by the company. In its most recent update, ARB stated that it had mined more Bitcoins last month than in April. A strategic investment in financial tech firm Wonderfi was also announced, along with steps the company had taken to address concerns over the impact of mining on the environment.
Unfortunately, this hasn’t been enough to stop the company’s shares falling alongside the price of Bitcoin itself. The recent decision by China to ban banks from providing services relating to cryptocurrency transactions is partly responsible. Elon Musk’s on-off love affair with Bitcoin probably hasn’t helped either.
On top of this, I’m confident the significant fall in Argo Blockchain’s share price over recent months can be attributed to some good, old-fashioned profit-taking. If I’d achieved the incredible gains made by some since last December, I might be doing the same.
So, does a 50% tumble in ARB now make it my cup of crypto tea and worthy of a crafty trade? The quick answer is ‘no’. As a long-term investor, I’m not interested in jumping in and out of stocks. I know I can’t predict the Argo Blockchain share price over the next few days or weeks with any certainty. The same goes for Bitcoin.
An alternative to ARB
All that said, I am increasingly bullish on blockchain technology in general and its ability to revolutionise finance, as well as providing certainty in events such as elections. This being the case, I’ve found an investment that suits my risk profile: The Invesco Elwood Global Blockchain UCITS ETF.
As its name suggests, this passive fund is charged with tracking the performance of a group of companies in both developed and emerging markets. Some of these, such as GMO Internet and Hive Blockchain Technologies, are already involved in this ecosystem. Other members are deemed likely to participate in it in a major way in the future.
Naturally, this means the make-up of the index is fluid. Companies will be removed and replaced every three months as blockchain technology develops. These changes will be reflected in the fund as well.
So, this is a guaranteed winner?
Absolutely not! The Invesco fund still has the potential to fall hard in the event of more negative cryptocurrency news. The same can be said for the Argo Blockchain share price, of course.
Since its £1bn in assets is spread over 51 holdings, however, I think the Invesco fund offers a safer way of tapping into this potential megatrend. The management fee of 0.65% also feels reasonable for a specialised fund, albeit a passive one.
To be clear, this holding is speculative; most of my cash remains in proven, high-quality stocks from elsewhere in the market. If blockchain doesn’t succeed in disrupting many industries, the rest of my portfolio should offset losses here.
And I’ll be leaving ARB to those with stronger stomachs.