UK’s Argo Blockchain to Close Cryptocurrency Mining-as-a-Service (MaaS) Contracts by April
If there’s any sector of the crypto community that has felt the effects of the bitcoin price crash, it is the mining industry, which saw many prominent firms close down and those that have survived thus far have been forced to undergo major operations changes.
One of such firms is Argo, a British crypto mining provider who announced on February 15, 2019, that they would be taking on some new cost-cutting measures as part of their restructuring.
Trimming The Fat
As part of these new measures, the firm will be shutting down their Mining-as-a-Service (MaaS) operations and will now focus completely on direct mining. This is expected as the costs of mining cryptocurrency are quite high and because of the slump in price, it is no longer as profitable to mike crypto as it was before and that has caused the business to suffer. To keep up with profitability requirements, the firm is evolving.
“The redeployment of the mining infrastructure and capital is expected to be profitable following a material reduction in input costs achieved from suppliers,”
the statement says,
“The restructuring measures and strategy refocus are expected to reduce the overall cash burn and deliver EBITDA (earnings before interest, taxes, depreciation, and amortization) break-even in the second half of 2019.”
Also, all business costs will be reduced by a third form now on, which is a commonly used tactic when an industry is going through hard times. If a firm cannot increase revenue, such as in a case like this, the next step is to reduce expenditure in any way possible.
“While it is disappointing to make this shift after delivering better-than-expected growth during our first six months as a consumer business, we need to be prudent and act decisively in order to ride out the downturn and be in a strong position when industry fundamentals improve,”
said CEO and co-founder Mike Edwards.
Braving The Storm
While those developments might seem unfortunate, Argo is actually doing much better than other firms. The crypto winter, within weeks, led to the closure of such giants such as GigaWatt and the fact that Argo even has its doors open months into the slump is impressive.
If their newly announced cost-cutting measures are effective, they might just be able to brave the crypto winter and come out on top once the market recovers. As for whether crypto mining will ever reach the heights of profitability that it once enjoyed, only time will tell.