A bitcoin mining and digital payments company – Digital CC Ltd – has been forced to explain plummeting share prices and high share trading, as the company struggles to negotiate the volatile bitcoin terrain.
The Australian company has experienced a steady downward trend since it listed on the Australian Securities Exchange (ASX) last year.
The company’s share price dramatically dropped from a relatively steady AU$0.14 on January 14 to an intra-day low of AU$0.083 on January 16.
At the same time, the volume of its shares shifted from 9,000 on Wednesday last week to 416,125 on Friday.
The curious activity prompted the ASX to send Digital CC a notice questioning the company’s share activity.
Digital CC are pinning the blame on a 22% dump in value that bitcoin experienced on January 14.
“The current bitcoin price impacts the profitability of the company’s ongoing inventory, which is what the company believes is the reason for the recent price movement,” Digital CC secretary Rachel Jellef said in the company’s response to the query.
Bitcoin’s unpredictable nature is nothing new, yet the plunge it experienced last week, from $224 to $175 has been one of the largest in its short and bumpy history.
In a bid to balance the books, Digital CC has had to reduce its overheads to cushion the unpredictable fluctuations of bitcoin mining.
“To maintain profitable operating margins in its mining activities given the recent decrease in the price of bitcoin, the company has been renegotiating power and other operating costs to maintain competitiveness in a lower bitcoin price environment which currently exists,” the company said.
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