UK-Based Blockchain “Minnows” Face Rip Current
The bitcoin price has turned positive, taking many correlated altcoins higher with it after being punished for much of the weekend amid BTC’s modest declines. The recovery in the broader crypto market, meanwhile, appears to also be lifting the boats of a handful of UK-based blockchain startups, which the Financial Times refers to as “minnows”, or companies that were launched during the hype but have since had to face a strong current of selling pressure. Among these “minnows” are Argo Blockchain and On-Line Blockchain, both of which have decided to dive into crypto’s high tide.
London-based Argo Blockchain, whose crypto mining operation is based in Quebec, just listed its shares on the London Stock Exchange (LSE). Argo operates a cryptocurrency mining pool, giving users the ability to “share computing power” to mine Bitcoin Gold, Ethereum, Ethereum Classic and Zcash via a smartphone, for instance.
Argo attracted $32 million to its coffers, attaching a $61 million valuation to the company and the status as the maiden crypto mining company to go public on the LSE. But with the stature comes the whims of cryptocurrency prices, which has seemingly made Argo’s stock a target in the equity market, as evidenced by the stock’s near 30% decline since its IPO earlier this month from 13.05p to 9.25p. It’s not the response any listed company is looking for and could explain why crypto mining giant Bitmain is reportedly waiting until after the summer for its expected Hong Kong IPO filing, which is when some market veterans are predicting the bull run to begin.
Argo isn’t the only mining-fueled startup facing the undertow. As Hacked.com previously reported, Genesis Mining recently referenced the challenging environment for cryptocurrency miners, revising its contract terms amid “reduced mining outputs.” Argo Blockchain’s (ARB.L) stock added 1% on Friday when the bitcoin price was on the rise.
UK-based blockchain R&D firm On-Line Blockchain took a page out the book of Long Island Blockchain when it pursued a makeover in an attempt to capitalize on bitcoin fever. The company shifted its focus from backing “internet and information businesses” to incubating crypto startups. On-Line had a good run from year-end 2017 to the new year, but once the downtrend in cryptocurrency prices hit, it spilled over into the performance of this company.
On-Line Blockchain’s soared nearly 400% last October on the heels of the name change, but year-to-date the stock has been slashed from $87 to $39.50. Investors have had little to cheer about the company, which has announced a few blockchain-fueled developments since the restructuring, including a crypto-mining pool and a new digital currency dubbed PlusOneCoin, but neither appear to have taken off. Most recently On-Line backed crypto-gaming company Encryptid Gaming with a $100,000 investment, the FT reported. Meanwhile, On-Line Blockchain (OBC.L) gained 5% on Friday alongside the gains in the bitcoin price.
The recovery in crypto prices has been comprised of fits and starts, one that most recently is showing a lot of green. Bitcoin, with more than 51% dominance, is calling the shots as correlated altcoins — similar to the UK’s “minnows” — wait on its every whim.
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