Argo Blockchain: A FTSE Stock For Cryptocurrency Investors

 | Mar 05, 2021 20:31

Blockchain technology, also referred to as Distributed Ledger Technology (DLT), has attracted significant industry and investor attention.

Many analysts regard the financial sector as the primary user of the blockchain concept. Such an emphasis is partly because the most popular application of blockchain technology has been in the cryptocurrency space.

Meanwhile, over the past year, cryptocurrencies, including Bitcoin, Cardano, Ethereum, Polkadot, Stellar, have been hot. For instance, year-to-date (YTD) Bitcoin has returned over 70%. And over the past year, Bitcoin is up close to 450%.

Fry J and J-P Serbera of the University of Bradford, UK, point out :

"Bitcoin is the first widespread usage of blockchain technology. However, blockchain has an identity and a reach potentially far beyond this. There appear to be two key conditions for blockchain applications. These conditions are convenience and consensus/trust."

Further research by the US National Institute of Standards and Technology highlights :

"Blockchains are tamper evident and tamper resistant digital ledgers implemented in a distributed fashion (i.e., without a central repository) and usually without a central authority (i.e., a bank, company, or government)."

We previously discussed investing in exchange-traded funds with a focus on blockchain. Today, we extend the discussion to another British business that has been among the highest gainers on the London Stock Exchange (LSE). It is the crypto miner Argo Blockchain (LON:ARB) (OTC:ARBKF).

The company's share price has become somewhat of a proxy for cryptocurrencies, especially for the price of Bitcoin. Let's take a closer look.

h2 Argo Blockchain/h2

London-based Argo Blockchain mines Bitcoin and Zcash at its facilities in North America. The group prides itself as the only cryptocurrency mining company listed on the LSE. Its market capitalization is shy of £1 billion (or about $1.4 billion).

Argo has recently announced it is investing in a new facility in Texas. Some of the cost will be raised from a new share issuance. Given the share price growth in recent months, such a move makes financial sense. The current higher market valuation allows it to raise money more easily.

Over the past year, ARB stock is up over 4,700%. Put another way, the proverbial $1,000 invested in the shares a year ago would now be worth about $48,000. YTD, ARB shares have returned about 700%. On Mar. 4, the stock closed at 266.57p ($3.55 for US-based shares).