The Argo Blockchain (LSE: ARB) share price has had a mixed 2021. As the price of Bitcoin surged during the first half, shares in the cryptocurrency miner rallied strongly. The stock added more than 700% between the beginning of January and the beginning of March.Â
However, the stock has been under pressure since touching a 52-week high of nearly 290p in the first half. It has lost two-thirds of its value since the beginning of March although, over the past 12 months, the Argo Blockchain share price has still returned more than 500%.Â
The question now is, what happens next year?
The Argo Blockchain outlookÂ
Over the past year, Argo has really transformed as a business. Its cryptocurrency mining operation is highly profitable and generates a recurring income stream. It has also accumulated a large number of crypto coins on its balance sheet, providing capital and financing to fund expansion plans.Â
On top of these positive fundamentals, the firm is in the process of developing a substantial Bitcoin mining operation in Texas. The new facility will increase output and allow the company to move away from using fossil fuels to mine, as it will be powered by renewable energy.Â
Even though the company is investing heavily for growth, its fortunes are tied (to a certain extent) to the Bitcoin price. No matter how many coins the group mines, it can only sell them for what the market is willing to accept. The same is true for the value of the coins on its balance sheet.Â
If the price of Bitcoin drops 10%, Argo has to accept the decline. It can get around this issue by not selling. This is something the firm has been doing by holding the cryptocurrency on its balance sheet.
It can hold on and wait for better prices, although if the Bitcoin price remains depressed, it may never get a better price. The company could be taking a considerable risk by waiting around for the next price rally.Â
Bitcoin fortunesÂ
Of course, it is impossible to predict what the future holds for any share price. I cannot say with any level of certainty how Bitcoin will trade next year, and if Argo will hit its growth targets.Â
Nevertheless, I can evaluate the risks and potential rewards for owning the Argo Blockchain share price at current levels. I think the company is attractive as an investment, especially if the cryptocurrency sector continues to grow. Compared to its US-listed peers, the stock even looks cheap on an earnings and sales basis.Â
Still, without any significant catalyst, the stock could remain cheap for the foreseeable future. It could even become cheaper if cryptocurrency prices fall substantially from current levels.
Based on these factors, I am happy to buy the stock for my portfolio in 2021, although I will be limiting it to a speculative position, considering the risks involved.