Ethereum hits new high as blockchain miner Argo posts record revenue
W e’re taking a look at the latest news in the crypto and blockchain space, including a new high for ethereum [ETH] and miner Argo Blockchain [ARB.L] continuing to produce record revenue. Coindesk also unveiled its Q1 2021 crypto report, with a new record value for bitcoin and a pickup in retail trading activity.
Looking at the wider sector, the Blockchain theme outperformed the S&P 500 index last week, rising 1.39% versus the S&P’s 1.03% gain (as of 9 April’s close), but is still lower over the month, down 2.09%, versus a gain of 2.24% in the S&P 500.
Is Ethereum’s new all-time high just the beginning?
Ethereum reached a new all-time high of $2,151.25 on 6 April, according to Coindesk, helping push the crypto market to an overall valuation of $2trn for the first time a day earlier. After dipping back below the $2,000 level on Wednesday, ETH retook $2,000 on Thursday.
Billionaire investor and NBA’s Dallas Mavericks owner Mark Cuban reckons ethereum has more potential than bitcoin in the long term, as reported by Blockchain News: “I think the applications leveraging smart contracts and extensions on ethereum will dwarf bitcoin. Bitcoin, right now, has evolved to be primarily a store value, and it’s very difficult to use it for anything else … you really have to work a lot harder on bitcoin than you do on ethereum.”
Cuban has also bought and created non-fungible tokens (NFTs), which are bought and sold on the ethereum blockchain, and invested in the NFT platform Mintable.
“I think the applications leveraging smart contracts and extensions on ethereum will dwarf bitcoin. Bitcoin, right now, has evolved to be primarily a store value, and it’s very difficult to use it for anything else … you really have to work a lot harder on bitcoin than you do on ethereum” - Mark Cuban
Argo Blockchain posts another mining revenue record
Crypto miner Argo Blockchain reported another record month in March, as revenue reached £6.57m, a sizable jump from February’s £4.34m, reports Proactive Investors. Three successive months of record profit and revenue from its cryptocurrency mining operations also mean Argo has recorded its best quarter ever. In its March update, Argo said it mined 165 bitcoin [BTC], up from 129 BTC in February, taking the total in Q1 this year to 387 BTC, and £13.4m in revenue. Formed in early 2018 and launched on the London Stock Exchange in August the same year, Argo’s share price is up a mammoth 5,794.74% in the last 12 months, having closed last week at 224.00p.
Argo now holds 764 BTC as of the end of Q1. CEO Peter Wall said, “I’m delighted that Argo has generated record mining revenue and profits for the third month in a row, making this quarter Argo’s best performing since the company’s inception”.
Wall also commented on the firm’s clean energy drive: “I am also thrilled that we are working with DMG [Blockchain Solutions] to achieve something we believe will be truly transformational in the crypto space in the creation of Terra Pool, the first bitcoin mining pool that will be powered by clean energy.” When the tie-up was revealed on 26 March, Wall confirmed that “addressing climate change is a priority for Argo.”
“I am also thrilled that we are working with DMG [Blockchain Solutions] to achieve something we believe will be truly transformational in the crypto space in the creation of Terra Pool, the first bitcoin mining pool that will be powered by clean energy” - Argo Blockchain CEO Peter Wall
Bitcoin passes $1trn as retail trading interest rises
Bitcoin’s market cap crossed the “strong psychological level” of $1trn in the first quarter of 2021, which, Coindesk reported in its Q1 review of crypto trends, “is significant because many institutional investors won’t consider an asset group until it’s a sufficient size.” Indeed, there’s little doubt that bitcoin’s price hike has been boosted by institutional investor activity, including Elon Musk’s Tesla [TSLA], which bought $1.5bn worth of bitcoin in February. Deutsche Bank [DBK] and BNY Mellon [BK] also announced crypto custody offerings, and business intelligence firm MicroStrategy [MSTR] continues to buy significant amounts of the crypto. MSTR purchased 253 bitcoin for $15m last week, taking its overall holding to over 90,000, at a total cost of $2.23bn, reports Coindesk.
While institutional participation helped to propel the crypto industry’s growth in Q4 2020, Coindesk reports that a number of metrics are showing interest from retail traders is picking up. Trading volumes from exchanges that institutions typically use, such as LMAX and Coinbase, tailed off in Q1. While BTC futures trading volumes were fairly flat, open interest continued to grow, indicating increasing leverage and trading activity. In January, the Chicago Mercantile Exchange reached its highest level of open interest in the crypto market, but it has since been overtaken by retail-focused exchanges, such as Binance and Bybit.
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Ethereum Reaches New All-time High Of $2,200
Bloomberg
(Bloomberg) – For Ahmad BinDawood, last year’s share offering in the eponymous Saudi grocery business was a chance to shape his legacy at the family firm he’s worked at since the age of eight, while cementing a $3.1 billion fortune built over the decades by his father and uncles.As the October public offering of BinDawood Holding Co. got underway, details emerged of some $76 million in previously undisclosed loans made by the Saudi company to family members. In a departure from the traditional secrecy associated with the kingdom’s family firms, Jeddah-based BinDawood revealed everything, put the IPO on hold and gave buyers the chance to take their money back.As the loans were quickly repaid, the sale resumed and eventually raised about $500 million for the family, attracting $29 billion in bids along the way.“We have to be very transparent with investors,” BinDawood said in an interview in Riyadh last month. “If there is any disclosure at any time that we need to make, we will go ahead and do it. So we took this on the shoulder and decided to announce it.”The success of the IPO has helped establish BinDawood, 37, as one of a new breed of Saudi executives rising within a corporate world that was largely off-limits to foreigners until a few years ago. What’s more, it has made him emblematic of a drive to shake up traditional ways of doing business, dovetailing with Saudi Crown Prince Mohammed bin Salman’s goal of transforming the oil-rich kingdom into a regional business hub.That mold-breaking character can even be seen inside BinDawood stores. The past few months have seen the company doing prominent Valentine’s Day and Easter promotions, a move unthinkable just a few years ago in a country that has historically adhered to a strict Wahhabist interpretation of Islam.Prince Mohammed’s commitment to reshaping the economy isn’t all working in BinDawood’s favor. A sudden decision to triple value added tax last year hit consumer spending. Higher customs duties and fees on expatriates are driving up costs for Saudi firms, too. And all at a time when the Covid-19 pandemic has been stoking unemployment.“We remain cautious of near-to-mid term growth across the consumers space as market size shrinks on potential expat depopulation,” said Mehwish Zafar, a senior equity analyst at Arqaam Capital in Dubai who has a “hold” recommendation on the shares. Like-for-like sales growth will probably be negative until at least 2022, he said, with growth only coming from new store openings or acquisitions.Shares in BinDawood jumped more than 30% in the days immediately after the sale. They have since slipped back, showing as of Monday a gain of about 11.5% from the listing price.It’s a performance that has helped buttress the family’s bid to diversify into other assets while strengthening the core business, a goal identified by Ahmad BinDawood as key to avoiding the kind of strife his father feared might undermine the business as it passed to a new generation.“The majority of family businesses don’t survive the transition to the third generation, and that’s something that concerned my father a lot,” BinDawood said.Pilgrims ProgressThe rise of the BinDawood business has been some 40 years in the making. Once a small-time vendor of Arabian perfumes and groceries to pilgrims visiting the Islamic holy sites of Mecca and Medina, it is now a nationwide concern spanning supermarkets and hypermarkets, hotels and distribution centers. The grocery business alone employs more than 10,000 people across 74 stores.Ahmad BinDawood’s own destiny was sealed as soon as his father, Abdulrazzag BinDawood graduated in the 1980’s from the King Fahd University of Petroleum and Minerals in Dhahran. Instead of following his peers into the oil industry, he decided to join his brothers Ismail and Abdullah in their burgeoning retail trade.Which is why Ahmad found himself on the front line at such a young age. At just eight, he was helping to sell items to the pilgrims during his school holidays, envious of friends who were away avoiding Saudi Arabia’s scorching summers.“Our friends were traveling and off enjoying themselves and sometimes we would would ask: why not us?” BinDawood said. “But that experience built the passion in us to stay in the business that our father and our uncles built.”A decision to push into online shopping and delivery helped prepare the firm for lockdowns during the coronavirus pandemic, but couldn’t outweigh the hit from the absence of religious tourists who were prevented from entering the kingdom for much of the year. While profit climbed almost 7% last year, it had slumped more than 53% in the fourth quarter as Saudi Arabia reimposed travel restrictions.BinDawood is still optimistic that shoppers will return as travel resumes, though how quickly pilgrims come back to Saudi Arabia in anything like their previous numbers remains uncertain.Next up may be the purchase of a rival grocery chain to expand into neighboring countries, BinDawood said. At the same time, the IPO proceeds will help further develop the BinDawood Group family office, which Ahmad’s father is now running. That fortune, which is split across several family members, is estimated at about $3.1 billion, according to the Bloomberg Billionaires Index.“The IPO had two main angles to it – sustainability and continuity of the business first, and second the diversification for the family,” he said. “We are in the process of building the family office and bringing in the right talent.”More family businesses are likely to follow in BinDawood’s footsteps. The IPO of Saudi Aramco in 2019, which many Saudis never thought they would see, “has been a massive driver in motivating families to take their operating businesses public to help grow their enterprises and generate new wealth,” said Tayyab Mohamed, co-founder of London-based family office staffing firm, Agreus Group.For all the challenges, Ahmad BinDawood is optimistic, citing his life-long involvement in the business as a foundation for success.“Retail is embedded in our DNA now,” he said.(Updates share performance in ninth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.