London Stock Exchange-listed cryptocurrency mining firm, Argo Blockchain has secured a loan facility worth £14 million ($20 million) from Galaxy Digital. Per the announcement, the loan which will run for six months is needed to prevent the firm from selling off its Bitcoin (BTC) holdings amidst the ongoing bear market.
Argo is pleased to announce it has secured a £14 million ($20 million) loan agreement for a term of six months with @GalaxyDigitalHQ using a portion of the Company’s Bitcoin holding as collateral. #ARB $ARBKF
— Argo (@ArgoBlockchain) June 29, 2021
In the past couple of years, a number of institutional investors have started betting on Bitcoin, and other digital currencies. These bets involve the purchase and the holding of the digital assets on their balance sheets, however, others invested in helping to build out the cryptocurrency ecosystem. Argo Blockchain is one of the institutional cryptocurrency mining firms that has leveraged the growing importance and the embrace of Bitcoin to shore up its operations.
According to the company, the $20 million loan secured was collateralized using its Bitcoin holdings, and the proceeds will be used to establish a data center in West Texas as well as to meet its operating cash flow requirements.
“We are delighted to work with @GalaxyDigitalHQ as we pursue our growth plans, and to form a solid relationship with them as a financing partner,” said Peter Wall, Chief Executive Officer of Argo Blockchain. “This agreement allows Argo to secure competitive terms on a loan facility while also allowing us to continue to HODL our Bitcoin.”
Amongst other benefits, the loan will let Argo Blockchain continue to HODL its mined Bitcoins
China’s Cryptocurrency Mining Ban Ideal Time for Expansion
Argo Blockchain may be amongst the mining companies that will benefit from the China-issued quit notice to miners operating in the country. The ban on mining and other cryptocurrency-related activities has been fueling moves by mining firms to invest in this cash-intensive activity around the world. This many argue will help to cover the loopholes the clampdown in China might have ushered in.
Argo Blockchain’s proposed mining expansion to North America will help the company secure a good market share in the mining space, a move industry veteran, Galaxy Digital is committed to.
“Galaxy is committed to creating tailored financial solutions to support miners. We are happy to provide Argo capital financing and products allowing them to scale and evolve,” said Amanda Fabiano, and Luka Jankovic, Head of Mining and Head of Lending at Galaxy Digital respectively.