The Argo Blockchain (LSE:ARB) share price is suffering from the recent effects of China’s cryptocurrency ban. Despite the fall in the price of Bitcoin, the company continues to pursue its growth strategy. Last week, management announced that an order for 20,000 Bitmain Antminer S19J Pro machines had been placed.
So what?
Antminer’s are high-performance computers, which are specifically designed to mine cryptocurrencies. Once installed, these will provide a 2.0 Exahash hash rate (a unit of mining speed). By comparison, Argo Blockchain’s existing mining infrastructure produces 1.7 Exahash.
These new devices will be delivered in monthly batches as of the second quarter of 2022, with the final delivery by the end of the third quarter. And they’ll be installed in its Texas mining facility, which is currently under construction, with an estimated completion date of mid-2022.
What does this mean for the Argo Blockchain share price?
Once operational, these new devices will have more than doubled the firm’s mining capacity. Assuming Bitcoin prices remains at current levels, revenues will increase by the same amount. But the likelihood of cryptocurrency prices staying stable is exceptionally low given their volatile nature.
Furthermore, suppose other governments decide to follow China’s footsteps and place stricter restrictions on these products, or even an outright ban? In that case, Bitcoin prices may continue to decline. Of course, the reverse could also happen, allowing the firm to achieve even higher sales. In other words, the Argo Blockchain share price is ultimately tied to the future price of Bitcoin.