There is no denying that the crypto market took a beating this year. It is a complete opposite of what the crypto market looked like in 2017. Bitcoin last year was able to hit near $20,000 as investors are optimistic about the future of crypto. But things didn’t go as planned. Regulatory changes triggered FUD within the market. And what observers were expecting as the entry of institutional investors didn’t happen. Until now, the market is undergoing changes. Are institutional investors waiting for the market to mature before going all out?
Bitcoin slumped all the way down below $3,500 due to a number of reasons triggered by the Bitcoin Cash hard fork. But of course, there are those who remain optimistic about the entire situation despite the bear market. Though there are some experts that even described the recent drop as the crypto bubble bursting, there are the likes of Mike Novogratz who still think that the crypto market will experience a bull run by 2019 or 2020.
Argo Ensures Investors
So what about the investors who brought their skin in the game? Do they feel optimistic or do they now want to minimize their losses and exit? For Bitcoin miner Argo blockchain, which is a company based in the UK, it was forced to soothe shareholder concerns.
Since early last month, Bitcoin companies including mining firms and software developers are already experiencing pressure because of the bearish market. For Argo, it remains adamant that their products and services are robust. Argo co-founder and director Mike Edwards mentioned that “Our mining packages are being snapped up as quickly as we make these available and demand continues to exceed supply”. He continued that “Despite a recent downturn in the cryptocurrency market, we are continuing to experience a strong ramp-up in revenues due to good execution of our growth strategy”.
Argo’s shares were listed on the London Stock Exchange in August. However, things went south since Bitcoin has also been having a difficult time in the past few months. Shares in early August were priced at £0.131. But late last month, it went all the way down to £0.043. However, this morning, the shares went up by 25% this morning mainly because of the statement released by the company to address uncertainties on the end of investors.
Edwards mentioned that “Argo’s long-term prospects remain bright and we look to the future with confidence”.
According to Argo, it has sold 10,325 crypto mining packages, compared to 4,200 crypto mining packages on October 1.
Cost of Mining
Lately, many are already questioning the practicality of crypto mining. Now that Bitcoin has dropped significantly by 80%, mining rigs are being turned off or even being sold as junk. It is not surprising that there are those questioning the short-term future of Bitcoin mining. Based on statistics, Bitcoin needs to be trading above $4,500 in order to make Bitcoin mining activity practical.
In fact, another reason for the recent drop in the price of Bitcoin is due to the decreasing hash rate in the network. It only means that many are quitting to mine Bitcoin.
It can be a problem especially moving forward for companies how they can keep up with investors. It might take a while before the hash rate and the price of Bitcoin finds its sweet spot.