We have spoken quite regularly about the the different strategies Crypto miners take in order to generate the most amount of value for shareholders. Some are a pure Bitcoin plays like Marathon Digital Holdings while others have taken a more diversified approach. Argo Blockchain are more of the latter, as a result the company mines a 3.3% of the total supply of ZCash, a little less known crypto currency each month and are being well rewarded for it.
For those who are not familiar with ZCash here is a description: Launched in October 2016, the Zcash network aims to offer more privacy than bitcoin and provides users with the option to use private transactions in order to keep transaction information private. Users must choose between two types of transactions when utilizing Zcash: Transparent transactions that make data publicly visible on the blockchain and private transactions that don’t reveal data. The total possible supply of zcash is 21 million coins. Eventually, 10% of total zcash supply will be allocated to the founders’ reward.
Mining ZCash is part of the diversification strategy that Argo Blockchain undertake to help them reduce the risk of harsh volatility in the price of bitcoin. That’s not to say that ZCash isn’t as volatile as Bitcoin because as you can see from the chart above, the price of the currency has moved quite a bit, with a 40% increase over the past month.
The diversification strategy is working for Argo. In their most recent quarter, the company announced that they mined a total of 163 bitcoin during the month of April. However, for those who follow the stock and RNS feeds closely they would have noticed that the difference in Bitcoin HODL increased by 172 over the course of the month. The 9 Bitcoin difference came from their ZCash strategy.
9 Bitcoin might not sound like much, but when you consider that ZCash is growing over time at a rate not too dissimilar to Bitcoin in the early days then it’s likely that Argo can keep benefiting greatly from this part of their mining operation. As the price of ZCash rises, the more money Argo has to convert into Bitcoin which ultimately increases the companies HODL amount by greater amounts each month than the total capacity they have on paper.
Final thoughts: If you love Argo, you should be watching out for ZCash, its becoming very important.
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