Argo Blockchain shares surged over 25% today, with the AIM-quoted crypto miner enjoying bitcoin price rally tailwinds.
It has provided a much-needed boost for a company that has spent the year contending with adverse market conditions and soaring energy costs.
Earlier this month the London-based miner, whose operations are based in Texas, raised £24mln to restore its balance sheet.
Argo Blockchain is not alone in facing difficulty though- all publicly listed bitcoin miners have seen their valuations tank in line with the crypto bear market.
Such is the risk involved in a sector largely correlative to bitcoin’s price.
Some miners have gone under and there is speculation that more could suffer the same fate if the price of bitcoin fails to substantially reverse.
It certainly has in the past 24 hours- bitcoin is up over 7% to US$20,673 and continues to rise at the time of writing as investors’ risk appetite increases on a softer US dollar.
Short BTC positions are also being cleared, helping to support the rally.
As some of the largest holders of bitcoin globally, miners have a degree of influence over the cryptocurrency’s price action.
Therefore, should miners choose to take short-term profits, bitcoin’s latest relief rally could face dilutive headwinds.