28th December 2022 > > BTC miners.

tl;dr

BTC miners are having a tough time, a fact reflected in their equity valuations.

Market Snap

Market Wrap

Markets ignoring that jump in 10 years probably because most people are still on holiday. If reports are accurate, the retreat of Putin’s murderous mercenaries appears to be gaining steam. A wholesale withdrawal by Russia would be a most wonderful start to 2023.

Curious Cryptos’ Commentary — The miners

The environment for BTC miners has undoubtedly been difficult throughout 2022 buffeted as they have been by the fall in the value of BTC allied with dramatic increases in their key variable cost namely energy.

One of the collateral victims has been BlockFi (see CCC dated 5th December 2022), a major lender to the mining industry whose lending practices veered into dangerous and frankly absurd territory.

A week ago Core Scientific announced voluntary filing for bankruptcy (https://www.prnewswire.com/news-releases/core-scientific-announces-comprehensive-restructuring-transaction-301708021.html) though operations are continuing with the expectation of a successful outcome to a restructuring of its convertible bonds.

The equity price of Core Scientific is down 98% on the year having been listed on Nasdaq since January 2022.

Greenidge Generation has restructured some of its debts but has warned that there is “substantial doubt” about its ability to continue operations. Its stock price is down 99% on the year (I think we can see a trend emerging).

Argo Blockchain has asked for its stock to be suspended ahead of a major announcement today.

On the 12th December 2022 Argo had made a statement (https://www.londonstockexchange.com/news-article/ARB/restoration-of-trading-on-the-lse/15754846) that it was in negotiations with a third party to “strengthen its balance sheet and improve its liquidity” to stave off Chapter 11 bankruptcy. I guess we will find out today whether those efforts were successful or not. Argo’s shares are down just 95% in 2022 (for disclosure purposes only – the CCC made a highly speculative investment in Argo earlier this month).

Riot Blockchain is down 86% on the year. Marathon Digital Holdings is down 91% for the year.

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Contrarians worldwide, who believe in the crypto revolution, can be expected to be using funds set aside for extremely speculative investments to make some moves in this space, though that is of course not investment advice.

When I say extremely speculative, this is off the scale compared to usual investments. One should probably expect some of these firms to collapse if the price action of BTC does not improve anytime soon. However, if any of these miners survive to the next bull market, the returns from investments made at these levels are likely to be turbo-charged.

Curious Cryptos’ Commentary — Breaking news

Argo has sold its mining facility to Galaxy Digital though it has kept its mining rigs and will continue operations as before. The stock opens at 7.49p, up 110% on the day. I can feel a doubling up coming on …