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Fwiw Galaxy loan had an amortization schedule of 32 months beginning Dec 22. Assuming that schedule remains unchanged final payment would be around Aug 25. Interest on that variable based on overnight fed + 11% - putting it at over 16% annually.
HC - i'd agree on that. Lot's of credit must go to Jim in the finance seat i think. Overall, they kept the ship sailing which is about all that could be hoped for during the bear. I'm interested to hear from Mr Chippas to see if he gives any indication on future strategy though.
Thanks, I think we can all agree like you say that this management have done an excellent job of surviving up until this point and in buying themselves time - I imagine they'll attempt one more placing in 2024 and that will guarantee survival until at least the hosting agreement comes to an end.
"Are you clued up on when their debt matures?"
I'm afraid not but they only have (just under) $13m left of the Galaxy Debt now so I wouldn't imagine this is nearly as pressing as it could have been. It's still a lot obviously in relation to their cash position but even if a fair chunk of it was due soon they may still be ok especially (as I think) they are still generating cash at the moment (so Galaxy may not be as hardball as they overwise might)?
"I'm sure a while ago you said Argo's cash break even was around $35k so i'm surprised you still think $60k-$70k post halving with how much difficulty has adjusted upwards since"
I probably did because it was (or pretty close to it). To be fair to the new management though they've done a decent job of controlling costs especially on overheads and better terms on electricity (via Galaxy). That said it is hard looking at one quarter as it can fluctuate a lot (fees, curtailments/rebates etc.) but the trend suggests $60-$70k) and you're right it could easily be higher, especially as Q3 was over 6 months ago.
For reference the cash breakeven in Q3 2023 was $27k (which was much lower than the $33k in Q2) so my range still assumes quite an uplift from this - partly difficulty, partly as Q3 benefitted from some handy rebates more than offsetting coins lost through curtailment).
Q4 should tell us more (especially on further overhead savings) although that quarter had the benefit of high fees and they actually mined 20% more than in Q3.
Are you clued up on when their debt matures? Is any of the remaining $55.2m due within the next couple of quarters? If so that'll be the next big hurdle before the end of the year when the hosting agreement ends. I know the senior notes aren't due til 2026 but I wasn't sure about the other $15.2m.
I'm sure a while ago you said Argo's cash break even was around $35k so i'm surprised you still think $60k-$70k post halving with how much difficulty has adjusted upwards since (ignoring temporary inflated fees), I'd have thought new break even would be more more like $80k-$90k but like you say, there's no room for growth and realistically any modest cash that is generated will need to pay off what's left of the Galaxy loan.
It was quite telling Mara finally had its first 10%+ day in ages only once it mined 9 blocks or so in previous 24hr period. Despite the madness of this sector, it's true market is behaving pretty rationally in lots of ways, with tangible progress being rewarded rather than just promises, or rampy words from execs that like to put out a lot of videos.
Overall things feel much more mature now than 2021, bit more cynical too, understandably so given the 2022 aftermath, nobody wants to be left holding the next Argo.
I think ARB's cash breakeven is around $60k to $70k (should get a better idea tomorrow) so $100k would give a comfortable margin though still not a lot to play with in terms of manufacturing any growth. That assumes a more normal level of fees and so at the moment they should be generating cash because of the current high fees instead.
So they look to have some breathing space at the moment but that's probably all it is. With fees likely to come back down and difficulty still rising they need to find some way to grow but that looks very challenging with the debt still high, poor prospects as far as raising goes and uncertainty over the Galaxy deal.
I can't see it either but it's also true for many mcaps that make no sense to me. When the market goes irrational anything can happen - why you would choose Argo over another miner who knows.
I agree with all that, I just don't think Argo will be one of those miners that does 3X to 5X i.e £210m to £350m even with BTC over $100k. Argo won't benefit from the higher price in terms of BTC held and will lose out on the difficulty front as it increases and they fail to grow to keep up with it. Argo probably won't even be generating cash at that BTC price if fees have come back down.
There's big moves to be had with some of the heavyweight miners though, that's for sure.
The bitcoin miner investor pool is fairly clued up/experienced is my read. You can see the way Mara has been punished for their operational issues and liberal use of the ATM - same with Riot and HUT with their issues, while CLSK has executed well and been rewarded by the markets. There seems to be logic to some of the share price movements.
We are still waiting for the point when the investor pool widens and things go crazy, but to me that requires BTC heading to 100 to bring more people in. It won't go as many multiples as 2021, but I think we could see 3 to 5 or more x's on a good number of miners if BTC goes above 100 - and I think it will all happen relatively quick.
I'm looking to close a high percentage of my holdings after bitcoin goes above 100k (if it happens).
You say that CLSK but bitcoin mining isn't the hyped sector it once was, the moves of yesteryear don't happen. Just look at Argo since the turn of the year, down 62% against a BTC price move of $40k to $66k. Investors are more sophisticated now, they know when a placing is coming and they back the f*** off immediately.
BTC really has to go ballistic in a very short space of time for Argo to explode imo.
Helios was switched on in 2022, so most were switched on then. Galaxy seemed to get a good PPA, and that is Argo's main asset just now, and more than makes up for the inefficiency of the ~30 J/T machines they have. However Argo's overheads are high (why who knows as all the work gets done by the host - Galaxy - so they have a lot of staff doing seemingly nothing), and the interest payments are a drag.
So at this point in time they are treading water fine in my opinion - perhaps sinking a little but not enough to drown them.
The real issue is the hosting agreement ends at the end of the year and it's not in Galaxy's shareholder's interest to continue the current agreement as it is, so I can't see that happening and that's the brick wall they are racing towards.
Yes they are overvalued by any fundamental analysis, but no chance would I short a bitcoin miner in a bull run. At the end of the bull run yes, but who knows when that is.
CLSK, in terms of Argo, we must be nearing the point where their rigs are starting to lose efficiency with the worst performing needing replacing? Weren't they switched on between 2020 and 2022?
The SP here has remained so artificially high, we're talking net liabilities, debt that dwarfs cash, back to burning rather than generating monthly cash (break even perhaps temporarily) and with their hosting agreement a few quarters away from ending - and still a market cap of £71m.
If only I had the cajones to short.
Yes that's the part that no one knows, I didn't think they'd still be elevated now but they still are.
HK etf goes live April 30 according to twitter.
I get that, so right now it's more like a quartering than a halving.
Still, from everything I'm reading there is an expectation that these sky high fees will drop back in the weeks ahead and we will be at a near halving of revenue, even if difficulty tails off a bit with it.
HC, currently miner revenue is around 75% of what it was pre-halving thanks to the elevated fees. I'm confident there is no post halving hash reduction, and expect network hash to carry on upwards.
So there hasn't been a "halving" for the miners as yet.
See fees column here:
https://explorer.btc.com/btc/blocks
Well the average fees since the halving is over the 3.125btc lost (3.79btc per block) even in the last 100 blocks the fee average is over 2.8btc (2.88btc) so I would say that the revenue from fees is covering for most of the loss of the halving reward.
‘Been a good post-halving so far 👍 Fees still elevated, who knows how long that lasts, not as crazy as the weekend, but still it's pretty surreal how at a quick glance if you were to look at overall rewards now, it's almost as if halving didn't happen.‘
Difficulty about to be adjusted up slightly so fees need to make up for about a 52% drop in revenue overnight. That’s not happening, not even close.
Been a good post-halving so far 👍 Fees still elevated, who knows how long that lasts, not as crazy as the weekend, but still it's pretty surreal how at a quick glance if you were to look at overall rewards now, it's almost as if halving didn't happen.
Same appears to go for hashrate at the moment too. I'm sure some miners that planned to pull older machines offline will have decided to keep them chugging along for longer on account of these fees. While that's the case difficulty will stay high too of course, so swings and roundabouts, but I don't think the market or anyone serious was ever banking on a sustained difficulty drop.
Same to you swans x
Looks like the halving FUD that smashed a lot of the miners last couple of weeks is over and with the TX fee increase, its not really been a true halving....Could be a very good cycle coming to us now and we should keep seeing BTC climb for the foreseeable too.
GLA
Cheers Chaebol.Very difficult selling anything at the moment.Quite happy with the positions already in.Good day for Mara and other miners at the moment.long may it continue.Best wishes with your investments and for yourself.atb
Not much idea tbf swans. I had a look early last year and cant see anything bad from the quick scan i just had..... from memory, zero debt which is pretty admirable and 4EH ish about 70 odd million in BTC and cash 230 mill mcap and a low share count. If it feels good and you cant see any obstacles in the way go for it swans, I just don't know enough on BTBT to be sincere.
Migi is my alt for now. If that hits 4 bucks again it either goes to another alt and i am liking WULF or probably into Mara.
Chaebol what’s you’re thoughts on Bit Digital.Lagging a bit but still gets a Zacs rating of 1.Does seem to be manipulated a lot.I ,m only using Zac as a point of reference it never influences me in any decision making.atb
Yeh makes sense.....I think those shares are issued officially on the 8th May, brokers no doubt forward sold them but id be looking around that date to see how those shares have been absorbed and hopefully a weaker price than now.