The recent turmoil in the cryptocurrency market has sent severe shockwaves to the mining industry with low crypto values and rising energy costs, creating an unstable situation for several leading mining firms to continue their operations.
The last two months have been rough for the leading Bitcoin mining firm Argo blockchain, with increasing concerns regarding running its mining facilities due to insufficient cash. Moreover, the steep downfall of over 40% in ARB’s share price has stressed its investors with the firm’s future potential and expansion.
However, the mining firm is expressing its crucial steps in avoiding bankruptcy by halting its London Stock Exchange (ARB) and Nasdaq (ARBK) shares. Additionally, the firm proceeds to sell its mining facilities to Galaxy Digital to continue the cash flow into the firm.
Galaxy Digital Becomes A Messiah For Eliminating Argo Blockchain’s Bankruptcy Risks!
As the trend of bankruptcies keeps growing after the sudden demise of the behemoth crypto exchange FTX, Argo Blockchain becomes the current target to continue the rally, which may result in a severe price dip for the Bitcoin market. According to a recent report, Argo Blockchain takes a step ahead to avoid its bankruptcy risks by seeking help from Mike Novogratz’s crypto-focused financial services firm, Galaxy Digital.
In a statement, Argo Blockchain agrees to sell its largest mining facility, i.e., Helios mining facility in Dickens Country, Texas, to Galaxy Digital for $65 million. Furthermore, the mining firm seeks a loan of $35 million from the crypto firm to continue funding the mining facility. Argo Blockchain stated that the loan would be secured by their mining equipment.
Argo’s CEO Peter said, “Over the last few months, we have been looking for a way to continue mining through the bear market, reduce our debt load, and maintain access to the unique power grid in Texas. This deal with Galaxy achieves all of these goals, and it lets us live to fight another day.”
Argo In A Do Or Die Situation
Selling off Argo’s biggest mining facility has been a tough decision for the crypto giant as it has up to 180 megawatts (MW) of power capacity and will be Galaxy Digital’s flagship mining operation after executing the deal. However, this step was necessary to keep investors in the firm as the deal will boost Argo’s balance sheet and eliminate the risks of bankruptcy filing after a $27 million deal collapsed in October.
Amanda Fabiano, Head of Mining at Galaxy, stated, “Quality infrastructure and access to low-cost energy are the cornerstones of a successful mining operation, making the acquisition of Helios an incredible milestone for the growth of Galaxy’s mining business.”
The Bitcoin mining giant previously promised its investors that it was looking for multiple negotiations with crypto firms to sell off its mining facilities and assets and execute smooth fundraising to avoid chapter 11 bankruptcy filing. It is to be noted that Argo Blockchain signed a two-year hosting agreement with Galaxy to secure a place for its computers to continue mining at the Helios facility.
Chris Ferraro, president and chief investment officer at Galaxy Digital, said, “We were in a position to solve the problem completely for Argo while accelerating the expansion of our own mining capabilities.”
Galaxy Digital finds this as a bear market opportunity to stand out amid the market’s downfall as the Helios mining facility will become the dominating choice that Galaxy made this year, pushing the firm to become one of the most competitive crypto firms in the crypto world.
Ferraro said, “Galaxy is aspiring to be one of the most trusted nodes of the decentralized future. The acquisition of Helios represents a new stage over our two-year journey in bitcoin mining that increases our operating scale and breadth of solutions, creating sustainable value for the biggest decentralized digital asset network and shareholders alike.”