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Should I buy Argo Blockchain shares at the current price?

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I think most investors know by now that Argo Blockchain (LSE: ARB) shares can be volatile. Over a year the stock is up 3,000%, but it has fallen more than 35% in the past month.

I reckon this blip in the stock price could be an opportunity to snap up some Argo Blockchain shares. Here’s why.

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Operational update

I’ve been bullish on the cryptocurrency miner for some time and continue to be. Its recent operational updates for March and the first quarter of 2021 were impressive.

Argo Blockchain’s total mining revenue for the first three months of the year was £13.4m. In fact, this was the company’s most profitable quarter since its inception. But I’m not surprised by this. It has been a busy period for the company and cryptocurrency in general.

What’s pleasing to see is that the income was “generated at an average mining margin of approximately 80% during Q1 2021”. To me, such numbers are fantastic. It indicates that the cryptocurrency market is a fast-growing one. And so far, Argo Blockchain has managed to capitalise on this opportunity efficiently. I think this could continue.

The innovator

I see Argo Blockchain as an innovative company. It’s the first of its kind to list on the London stock market. It’s also a relatively young firm operating with technology that I believe is in its infancy.

I like that it has embraced sustainability early on in its journey. I’ve commented on how the company has appointed Guidehouse as its climate strategy advisor. This comes after the cryptocurrency miner announced that it has teamed up with DMG Blockchain Solutions to create Terra Pool. This is the first Bitcoin mining pool that will powered by clean energy.

When a company is an innovator in its field, I don’t expect everything to be smooth sailing. The road will be full of twists and turns. But I think if Argo Blockchain can execute its recent endeavours successfully, it could be transformational for the company and thereby the shares.

Risks

Cryptocurrencies can be volatile and so I’d prepare for the same with Argo Blockchain’s share price. For instance if the value of popular cryptocurrency Bitcoin falls, then it’s likely the stock will decrease too. With that fact in mind, I’d only invest what I could afford to lose.

Countries including the US are looking to increase regulation of cryptocurrencies. Turkey has banned the use of such assets for the payment of services and goods. This could impact Argo Blockchain.

Recent news

I’m optimistic on the long-term prospects for cryptocurrencies and hence Argo Blockchain shares. It’s encouraging to see Coinbase come to the market through an initial public offering (IPO).

Coinbase is a platform where users can buy, sell and store many cryptocurrencies. It makes cryptocurrency investing more accessible to both institutional and retail customers. If the demand for these digital assets increases then there will be a greater need for cryptocurrency mining. This should be positive for Argo Blockchain shares in the long term and hence why I’d buy at the current price.

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Nadia Yaqub has no position in any of the shares and cryptocurrencies mentioned. The Motley Fool UK owns shares of and has recommended Bitcoin. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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