The UK-based Bitcoin miner Argo Blockchain has secured a six month loan from Galaxy Digital to build out its planned Texas Bitcoin mining operations.
Argo was able to use its Bitcoin holdings to secure the loan, which means it can maintain its holdings, and still expand its mining operations.
According to an announcement made earlier this year, Argo was planning to raise $17.5mln from new equity issuance, and secure a $100 million loan.
The deal with Galaxy seems to have taken care of the capital raise that was going to be covered by equity issuance, but the miner may need a little more cash to complete its project.
Argo isn’t a new face in the Bitcoin mining industry. It already has three mining operations in Canada, and this new Texas operation will be its fourth. So far Argo’s use of capital has been wise from the perspective of the share markets.
The company is publicly listed on the London Stock Exchange, and has seen its share price lag compared to other Bitcoin miners, such as Marathon Patent Group, and Riot Blockchain.
On the other hand, it is up nearly 10x since it was listed in 2018, in which time Bitcoin has risen almost 4x.
Lots of Room for Argo’s Expansion
While the equity markets may not be in love with Argo’s shares at the moment, it had no problem securing funds to keep expanding its business.
With cash in hand, Argo is ready to help fill in the Bitcoin mining gap that was recently created by new Chinese government action.
With almost all of the Chinese Bitcoin miners looking for greener pastures, new mining development projects that ensure a strong and reliable global Bitcoin network are likely to be welcomed by Bitcoin investors.
It is also interesting to see Argo’s use of Bitcoin as collateral for a fiat loan, which makes its mining activities far more valuable from the perspective of future financing efforts.
From the standpoint of Argo shareholders it is also a big win, as the company hasn’t needed to dilute the existing shareholder base.
More Coming in the World of Bitcoin Mining
The Chinese government’s move to all but banish Bitcoin from the Middle Kingdom may have far-reaching effects in the Bitcoin market from this point forward.
China was one of the first nations to make Bitcoin development a priority, and many of today’s most influential exchanges can trace their roots to Chinese developers.
The money invested in the Bitcoin mining operations that are now looking for a new home is likely substantial.
In addition to the earnings that are possible to create with Bitcoin mining, the talented staff at a Bitcoin mining company can also be a boon to energy-rich nations.
Countries like Iran and Russia have already created Bitcoin mining operations that have quasi-official status with the government.
It may come as a surprise, but there is actually a tremendous amount of energy that is wasted at commercial energy production facilities.
With a new boom in Bitcoin mining, comes the ability for nations to tap into wasted energy, and create an asset that is 100% liquid on the global market.
Larger Operations are Likely Coming
Another factor to consider is that unlike the early days of cryptos, numerous platforms now need to have a global mining network to ensure their safe and orderly operation.
We simply don’t know which platforms will be in-use a decade from now, but it seems likely that platforms like Ethereum, Cardano, Polkadot…and even Doge will be used, and also as good as fiat currency (or better in some cases).
All of these totally liquid tokens can be mined in some form or another, and DeFi-ready platforms also offer holders the ability to gain from staking.
Making a return on capital at a bank, or even in the bond market is as difficult as it has ever been, which may create added demand in the crypto mining space.