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Why is the ARB share price crashing?

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Argo Blockchain (LSE: ARB) shareholders aren’t having a great day Friday. As I write, the ARB share price has crashed 12%, which usually means cryptocurrency prices are dipping. And, yep, Bitcoin’s down 5%. So what’s happening?

It’s all about China. According to Bloomberg, the People’s Republic has declared all cryptocurrency payments illegal. This is the latest step in the country’s war on the crypto market, after earlier moves to crack down on cryptocurrency mining. China’s not too keen on financial transactions it can’t snoop on, and can’t control.

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China’s toughening stance might lie behind the failure of Bitcoin to regain its early 2021 highs of above $60,000. But then it seems cryptocurrency price movements could be caused by anything. At least this time it’s not down to an Elon Musk Tweet.

But never mind the coin itself, what does it all mean for the future of the Argo Blockchain share price? Well, Friday’s big crunch only sets the shares back a few pennies from where they were a couple of weeks ago. And they’re essentially flat over the past three months.

To look at the wider picture, Argo shares have now fallen more than 60% since their February highs, and that’s not a great result. But going back 12 months, we’re still looking at a massive gain of 2,300%.

ARB share price pressure

There’s fresh pressure on the Argo share price from the latest Chinese moves. But, so far, all it’s done is dampened the enthusiasm from the company’s moves into the US market. On 14 September, Argo announced an IPO for 7.5 million American Depositary Shares (ADS), each representing 10 ordinary shares. With an ADS priced at $15, the float raised gross proceeds of $112.5m.

There are plenty of investors who want to get in on cryptocurrency opportunities without buying the currency. I can understand that. There’s something of a shady underworld aura surrounding crypto trading (even if done perfectly honestly). But that disappears when it comes to buying shares openly on the stock market.

You get all the risks associated with cryptocurrency, without the benefit of nobody being able to see what you’re doing. Or something like that. Anyway, investors who want to buy crypto mining shares on the London Stock Exchange have only one option. They chase the ARB share price or, erm, they don’t.

Will I, won’t I?

So what would I do? I’m not going to risk my retirement fund on Argo Blockchain shares, that’s for sure. In fact, high-risk investments have never played much of a part in my investment strategy over the years, apart from the occasional growth share in my younger days. Oh, and Sirius Minerals. I must take care never to forget that foray.

But at the back of my mind, I keep getting a tempting thought. Why not risk a small amount on the ARB share price, just for fun? I’ve heard a good few people saying the same. And if I know I’m risking an amount that I can afford to lose, what’s the harm?

Whether I actually do it is a different question, mind.

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Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of investment advice. Bitcoin and other cryptocurrencies are highly speculative and volatile assets, which carry several risks, including the total loss of any monies invested. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

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