The publicly listed Bitcoin (BTC) miner from Wall Street and London’s City, Argo Blockchain (NASDAQ: ARBK, LSE: ARB) reported a net loss of $6.3 million in the third quarter as the cryptocurrency mining company grappled with challenging market conditions and reduced mining margins.

Wall Street Bitcoin Miner Argo's Profits Vanish as Bitcoin Blues Bite

Revenue fell to $7.5 million in Q3, down 28% from $10.4 million in the same period last year. The company mined 123 Bitcoin during the quarter, averaging 1.3 BTC per day.

Mining margins contracted significantly to 8% from 58% in the year-ago period, when the company benefited from power credits due to economic curtailments. Adjusted EBITDA swung to negative $2.1 million compared to positive $2.4 million last year.

"The third quarter was a difficult quarter for BTC miners, including Argo," said CEO Thomas Chippas. "It is positive that we have seen improvement in BTC mining economics in October, and that this has continued into November."

The results come after a better-than-expected first half of 2024. Despite a nearly 50% decline in the number of mined cryptocurrencies during that period, the company managed to increase its revenues by approximately 18%.

For the year-to-date period, the results are increasingly deteriorating. The net loss now exceeds $39 million, compared to $26 million reported during the same period last year.

A source of partial consolation may be the fact that Argo is not alone in facing losses. Bitfarms, Marathon Digital Holdings, TeraWulf, and HIVE Digital Technologies, the biggest players in the industry, all struggled to maintain profitability in Q3 2024. The only exception was Hut 8, which posted a modest net profit of $0.9 million.

Galaxy Digital’s Loan

The company ended the quarter with $2.5 million in cash and four Bitcoin. During Q3, Argo reduced its debt by $12.4 million, including fully repaying a loan from Galaxy Digital.

In early August, the company reported that it had repaid last $18 million out of a total $35 million debt owed to an entity owned by Mark Novogratz, a prominent figure in the cryptocurrency space. The loan was intended to save the Bitcoin Wall Street miner from collapse during its most challenging period and help stabilize its operations.

“Successfully repaying $35 million of high-interest rate debt ahead of schedule is a testament to Argo's financial discipline,” Argo’s CEO said in August. “We remain committed to optimizing our capital structure and driving long-term value for our shareholders.”

In a significant operational update, Argo disclosed that Galaxy Digital will not renew its hosting agreement at the Helios facility beyond December 28, 2024. The company is currently in discussions regarding the miners at that facility.

High-Performance Computing

Looking ahead, Argo is exploring diversification opportunities, including a potential expansion at its Baie-Comeau facility through a partnership with BE Global Development Limited to provide high-performance computing (HPC) solutions for AI applications.

“The High-Performance Computing hosting opportunity at our Baie Comeau facility is exciting and demonstrates our ability to diversify our capabilities beyond BTC into the growing AI computational market,” added Chippas. “At this juncture for the industry, we are keenly focused on growth opportunities that play to our deep expertise."

Argo Blockchain is among several Wall Street mining firms exploring new revenue streams by focusing on HPC and AI. This strategic shift aims to diversify operations and leverage the increasing demand for computational power in the AI sector. Matthew Sigel, head of digital assets research at investment management firm VanEck, estimates that this pivot could unlock $38 billion in value for mining companies by 2027.