London-based Bitcoin mining company Argo Blockchain announced Tuesday that it had requested NASDAQ to suspend the trading of its shares.
The token miner is currently listed on NASDAQ and the London Stock Exchange. Argo said trading would likely resume following a company announcement on Wednesday, which is scheduled to be delivered before the trading session opened.
This development followed earlier news that Argo was continuing negotiations with an unnamed third party regarding the sales of some of its assets. Before that, Argo had caused a stir among investors when it accidentally revealed a document that said it would voluntarily file for bankruptcy protection.
At our request, @Nasdaq temporarily suspended trading of Argo’s ADSs and unsecured notes for today - Tues Dec 27.
— Argo (@ArgoBlockchain) December 27, 2022
We’ll be making an announcement tomorrow (Dec 28) via RNS before the @LSEplc opens in the UK…we expect trading on Nasdaq to resume tomorrow.#ARB $ARBK #BTC
Argo said it remained "hopeful" with its ability to avoid such a filing but would keep that option open. Reports suggested that the deal was necessary for Argo to "strengthen its balance sheet and improve its liquidity."
According to data, Argo's stock was down 96.34 percent in 12 months. In the first week of November, investment companies like Jefferies and Canaccord Genuity even downgraded the stock to a lower rating.
Argo is not the only crypto miner who struggles through the prolonged crypto winter. Just last week, competitor Core Scientific filed for bankruptcy protection. Earlier in September, Compute North also filed for Chapter 11. Crypto miners who have gone through an initial public offering (IPO) have a collective debt of $4 billion this year.
Mining companies have to deal with increased electricity costs, plummeting crypto prices and greater mining difficulty throughout 2022. The increased production costs led to a surge in token sales across the sector.
Statistics showed that publicly listed Bitcoin miners had sold nearly all of their token supplies mined in 2022. For example, core Scientific sold 40,300 of its 40,700 Bitcoin units as of December 26. Argo, Cleans Park, Hut8, Iris Energy and some other miners sold their mined Bitcoin units from January 1 to November 30.
New RNS: we received notice from @Nasdaq as our ADSs have closed below $1 for 30 trading days
— Argo (@ArgoBlockchain) December 16, 2022
We have 180 days to cure this deficiency
No impact to our operations or LSE listing, and no impact to our ongoing negotiations
Full RNS: https://t.co/Au3txnlkHL
#ARB $ARBK #BTC
Miners' Bitcoin reserves decreased significantly in the second half of this year, especially throughout November when the crypto exchange FTX announced bankruptcy. FTX's implosion caused a wave of distrust in the entire crypto industry, especially with alleged misdeeds that led to the downfall of the exchange.
Recent data showed that Bitcoin reserves in crypto companies had improved in December, growing by almost one percent. Analysts said crypto mining companies were more stable this month.
Experts, like Messari crypto analyst Tom Dunleavy, and investors raised concerns about whether miners' sales would further push down Bitcoin's price. Capriole CEO Charles Edwards also commented on the hash ribbon matrics, saying it was the "most brutal" situation since 2016.
"Hash Ribbons capitulation has captured the lowest Bitcoin hash rate reading of 2022 as miners bankrupt and default under the great pressure of squeezed margins globally," Edwards said.
However, BitMEX former CEO Arthur Hayes said the surge of sales by miners had a "negligible" impact on Bitcoin price.
Last Monday, Bitcoin posted a $12.2 billion daily trading volume. That day, the outflow from mining companies accounted for only 0.13 percent of the total trading volume, with 919 units sold or equal to $15.35 million.
Bitcoin continues to drop
Data showed that Bitcoin would likely resume its fall in the coming days. Analysts said Bitcoin had yet to reach its macro price bottom, saying it could hit $10,000 a unit within the first quarter of 2023.
Despite trading on a flatline in the past weeks, analysts predicted that the situation would change entering 2023. Bitcoin still had not breached the 80 percent commonly found in previous bear markets, meaning it might plunge even further.
Glassnode reported that both short-term and long-term Bitcoin investors suffered an unrealized loss this year. Short-term investors — entities holding Bitcoin for less than 155 days — collectively lose 1,889,585 Bitcoin units. Meanwhile, long-term investors lose around 6,057,858 units.