Argo Blockchain has once again secured a loan agreement from Galaxy Digital using its Bitcoin holdings as collateral, the London Stock Exchange posted on 10 September.
According to the agreement, Galaxy Digital has agreed to provide an £18 million loan (around $25 million) to crypto mining company Argo Blockchain, which will use its BTC holdings as collateral. This is the second BTC-backed loan the company was able to receive from Galaxy Digital this year, with it having secured a £14 million ($20 million) loan back in June. The company said on Twitter:
“The loan will enable Argo to retain its current Bitcoin holding, whilst further expanding its mining operations. Argo is delighted to continue working with Galaxy as its financing partner.”
Under the terms of the deal, Argo’s existing loan will be rolled into the new agreement, for a combined total of $45 million. The company will reportedly use the newly acquired funds to meet its existing cash flow requirements, as well as support the expansion of its mining operation in West Texas. Back in March, Argo purchased 320 acres of land in West Texas with the intention of creating a 200-megawatt BTC mining facility.
By securing a BTC-backed loan, the company is able to increase its available capital without liquidating the coins it is currently holding. The new agreement has set the maturity date for the loan to 29 October, meaning the company is bullish on the price of the largest cryptocurrency by market cap. If its bet pays off, and the price of BTC increases in the next two months, Argo will be able to repay both its loans with fewer coins, earning it a significant yield from its BTC holdings.