Argo Blockchain, a Bitcoin mining company, saw its own mining margin shrink to 20% in August due to rising natural gas prices. The firm stated on Friday.The miner agreed to host 32 megawatts of mining machinery, enough to power approximately 10,000 rigs.
The facility uses electricity purchased on the spot market to power its operations. This year, the facility’s high energy costs have impacted profitability.
Margins dropped to 37% from 74% in January
After being 74% high in January, the margin had dropped to 37% by July. To reduce its volatility in the energy markets, the company is seeking a long-term fixed-price power purchase agreement.
Argo stated that the average spot power price in West Texas was $0.09/kWh. This is almost three times the average price in August prior years.
Wolfie Zhao , a mining analyst, noted via Twitter that gross margins have fallen for some of the most recent mining machines due to current market conditions. His calculations show that Bitmain Antminer S19Pro & S19XP have dropped to 44% & 23%, respectively.
According to the statement, Argo signed an agreement to host 32 megawatts (roughly 10,000) of mining machines.
Argo has been installing its own mining equipment
The quarter of net profits from mining bitcoin with these machines will be paid to the London-based company. Companies that do not own or operate their infrastructure may have their machines hosted by another company.
Since April , Argo has been installing its own mining machines at Helios. lowered its expectations for its own hash rate , or computing power on bitcoin network for the remainder of the year.
As of 8:49 UTC, the company’s shares were up 9.8% on London Stock Exchange.
Argo Blockchain is a world-leading cryptocurrency miner, championing the use of renewable sources of power to support the growth and development of blockchain technologies.