Member Info for HarChris

I'm not questioning that Chaebol but whether a relief rally or not, if bitcoin fails to follow the nasdaq up the chances are it will still follow it on the way back down.

Putting the Argo shi*show aside for a second... anyone else think this could be a pivotal moment for bitcoin right now? Nasdaq soared yesterday and bitcoin hasn't followed as of yet (although trying right now), surely we see trading range broken in the coming days whether that be $17k or $22k?

The ironic thing is if this placing is to go through Argo would be much better off medium term if bitcoin were to stay depressed (or go lower) over the next six months, stretching the rest of the miners even further and eventually being in the same boat as Argo or even worse (administration). It would justify their decision and prove to be necessary.

Whereas if bitcoin did start to recover soon (nasdaq flying today) Argo would arguably be even worse off as they'll have just given away machines on the cheap and 15% of the company for just $34m whilst the likes of Riot & Corz & Mara will be raising $200m+ and others close to $100m and pulling ahead in the all important hash race to the death.

No one is thinking of it this way but I'm certain come 2025/2026 only half of these miners will have survived and so it's vitally important to compare across the sector rather than focusing on any one in isolation.

Not only that Hexam but if BTC did get to $40k by Christmas then you can be sure expansion plans across the sector will immediately recommence with some of the miners targeting as much as 5x hash rate growth by the end of next year.

So if we do see $40k by that point Argo will probably need $50k-$55k to be making a profit. We're in a sector where the biggest players are going to attempt to raise enough and survive as long as possible as loss leaders to eradicate competitors and eventually have the space to themselves.

Sharebel for your own sanity try to switch off and go out and get some fresh air, your ramping is doing nothing at all for the lowly share price and must be throughly exhausting.

It might go as high as 18p, it might go as low as 10p but it's not going to recover until there's clarity on funding.

The next bull run is going to be interesting. Until now ordinary folk have been the bitcoin backbone, millions of individuals who took a chance and kept a close eye on what was happening, dca'ing every month with their disposable income and believing that HODLing was the only way to win out in the long term.

The next bull cycle won't play out in the same way as it will be led and supercharged by institutions. But institutions don't HODL, institutions do not go along with mass consensus, institutions tend to stick to a certain allocation, 1%/2%/5% and if that allocation is exceeded through a sharp increase in price they will skim profits and bring that holding back to 1%/2%/5%.

Additionally PIs have become a lot savvier over the past few years. For many of them bitcoin was their introduction to the financial markets, to trading, to investing. People I know who have much of their net worth in bitcoin (/ethereum) are already planning to take profits when they get the chance, they themselves have lost faith in the HODL strategy and consider themselves, in essence, traders that aren't going to be left carrying the bags this time around.

As for the next generation of believers comment, where are they going to come from? Bitcoin attracted a certain type of anti-establishment, underground IT/gamer/hacker type over a period of 12 years, at an early enough stage that they could risk just £50 and if it came good they'd make thousands and if not, well it's £50. Nobody thinks investing £50 now is going to make any difference to their lives and at the market caps we are talking about this sort of adoption won't even leave a dent.

All of this means the ingredients that created such sharp and impactful bull markets in the past are no longer present and so it makes me wonder what could happen to see a move in say 2024 from $20k ($375b market cap) to $200k ($3.75T). Of course it's all about institutions now with serious capital but what could change between now and then that convinces buyers at $50k, at $100k, at $150k to continue holding instead of taking profits en masse?

AB it's something I've thought about a fair bit but it really depends on how the rest of the bear market plays out, more specifically how the next 12 months plays out. If BTC stays depressed through 2023 I think we can then be fairly confident that the next bull market is going to somewhat mirror the last, one with the potential for explosive moves, 500% moves in a matter of months. In this scenario I would be more aggressive and be unafraid of placings to raise money for immediate expansion. In a bull market the share price may pull back very briefly but if the money is for growth (and not to clear debts/cover admin costs) then the share price should have little trouble flying past the placing price. Still, the better the capitalised the longer a miner can wait to raise and so should be able to time a placing to their advantage rather than be forced to move first.

What we are more likely to see over the next 12 months is a number of relief rallies that portend the end of the bear cycle and if that happens I think ever more we'll see a differentiation in strategies. For example if BTC breaks out of trading range and breaks $25k I think we'll see a couple of miners spring a quick equity raise at roughly double(maybe 150%) the current share price. If BTC were then to fall back again in the coming months proving it was a simple relief rally then I'd be particularly interested in those miners that managed to shore up their finances before the next bull market has even begun and are therefore free to expand for months to come at bargain prices.

What we really should be looking for is miners that a) survive this bear market with near certainty and b) those best positioned to be delivering big profits as soon as the bull market strikes.

AB that’s exactly what I’m saying, there is a chance it all comes good but the odds are stacked against them now. All miners will rally when Bitcoin rallies next but Argo’s share price will always be somewhat hamstrung by the debt (and I was referring more to a situation in which they take on more debt through Binance Pool). Until that’s sorted punters will see Argo as a trade and be less comfortable holding for the long term, I bet even some of the LTHs on here will be looking for an exit.

For Argo to in any way compete and set themselves up enough to survive the next halving they are going to need Bitcoin to do a very quick reversal to $70k or higher and take advantage of peak hype and raise enough to get themselves back in the game. Get it wrong (and raise too early, or fail to raise enough) and they’ll be swallowed up by the competition.

Argo is seriously up against it now. The most recent rns shows that they are in no position to take advantage of the sharply falling prices of machines and not only that, by hosting their newest machines they are now essentially shrinking operations rather than building. If they were to take on more debt then the risk only grows as we'll be talking ~$100m due in the coming years for a company currently valued at $80m and far from profitable.

As I've said before Argo isn't finished but success now relies on both perfect execution of strategy and a whole mountain of luck. They are in an industry with virtually no barriers to entry where the winners win through being better funded alongside a mgmt team with a baseline level of competence.

Almost everything needs to go right for Argo if they are going to somehow be in a position where they can compete in the next bull market and that makes this an extremely risky long term investment.

This sort of thing is doomed to fail. All it will do is worsen the underlying fundamentals for high cash-burning miners due to ever increasing hash rate and introduce further debt into the system before the whole thing blows up in one mega bubble two further years down the road.

Bitcoin prides itself on being a perfect market mechanism free of outside influence - how does propping up failing businesses fit into that narrative?

But which miners have the cash to actually buy thousands of machines off Corz, even at knock down prices? CLSK is a big favourite on here as they've been expanding recently but they have very limited cash left to continue this expansion in the months ahead... Mara? I know they have 60 million odd but even they'll need to reserve some of that surely to account for cash burn? Riot? I reckon new entities with capital may end up being the biggest winners here...

Having said that Corz probably won't be selling machines once they get into trouble, the creditors will come knocking before they have that option. Probably raise £75m to keep the lights on just a few more months around christmas and if bitcoin is still in the doldrums then it'll be the administrators asset stripping and selling off cheap rather than the company itself.

Ha yeah Chaebol I've stated previously my bitcoin mining investment thesis which is basically wait for the dominos to start falling and buy smart in the ensuring chaos - next to show internal bleeding has got to be Corz, current liabilities stand at $516m. They started the year with $118m cash, they've sold around 15000BTC since and are left with just $29m cash - that's how bad their cash burn is and now they are left with 1050BTC. Interestingly the last two days their BTC mined had dropped from 47 a day to 38/39, starting to switch off machines?

They've got a $100m common stock purchase agreement but I don't see it being anywhere near enough to keep them afloat so what we're looking at from one company alone is 5% of the entire network hash going offline.

The aim of the game is to buy the miners who are going to come out of this bear market the strongest, at a low price, although it's not at all necessary to chase the absolute bottom and risk missing out completely.

If the funding here was secured then anything below ~25p would look very good value now, however all the whilst it's in the balance the chance of bankruptcy is just too high to fit the above criteria.

Still arguably a reasonable bet at 15p for all the gamblers out there.

As things stand with the ever weakening Rand we are looking at a 2023 all in breakeven price of ~$30/kg (maybe lower) and we are still seeing US prices (which make up by far our biggest market) at around $45/kg (and rising). Producing 5200mtV next year and selling 2400mtV to the US at today's prices gives us $36m profit before tax from that market alone.

Thats 50% of today's market cap.

It partly depends on the investor's integrity. They will know the share price is only this low because of the doubt over funding (the potential for bankruptcy is being priced in) so, at least theoretically, if they go through with the placing at 27.6p the share price should rally to that price.

Still, if they are still interested I wouldn't be surprised if they ask for say 20% of the company now for $27m.

Arbk has actually rallied to $1.90 / 16.7p - share price should take a step up in the morning.

No poorinvestor you don't understand the difficulty mechanism. Right now the industry is on its arse because all miners are gambling on bitcoin turning before H1 2023 is out, they are continuing to expand with whatever money they have and this increasing hash rate coupled with low bitcoin price and high electricity costs means they are burning cash at unsustainble levels. However there will come a time when the dominos start falling and when that happens those that have survived will double, maybe treble their bitcoin mined, vastly reducing their breakeven bitcoin price and therefore returning to mining profitably.

Well my trade lasted all of three hours, think I'm very lucky to get out with the tiniest profit after that inflation readout.

Sure Argo could rally from here and if the funds come through will be a potential double bubble but too much risk for me.

Could someone explain to me what happens when a company on the nasdaq goes below $1 and why it's such a bad thing?

I took some at 13.5, after all why watch this without ever getting involved?!

Prob be out if we see the dizzy heights of 14.5 :D