Stronghold Announces January Bitcoin Mining and Carbon Capture Update
- Stronghold mined 192 Bitcoin in January 2024
- Generated approximately $0.4 million in energy revenue
- Company generated an estimated $8.0 million of revenue during January
- Test results demonstrated carbonation of up to 14% of starting weight of dry ash
- Company expects construction time for the second Karbolith to be approximately two weeks
- Bitcoin-equivalent production decreased by 6% from December 2023
- Lower hash price of $0.08 per TH/s per day in January compared to $0.10 in December
- Carbonation of approximately 10% on average for beneficial use ash samples
- Sequential decrease in revenue due to lower hash price and lower transaction fees
Insights
Stronghold Digital Mining's report indicates a decrease in Bitcoin-equivalent production by 6% from the previous month, which may concern investors focused on growth metrics. The drop is attributed to a lower hash price and transaction fees, which, in turn, are influenced by broader market factors such as Bitcoin's price volatility and network activity. Additionally, the mention of a 4% increase in network hash rate suggests rising competition, which could further pressure profit margins.
Revenue generation of $8.0 million, while significant, must be weighed against operational costs and the capital expenses of expanding carbon capture technology. The cost efficiency improvements in constructing a second Karbolith, with a reduction in cost from the first, indicate potential operational leverage and cost management, which could positively influence future profitability.
The update on Stronghold's carbon capture technology, specifically the Karbolith, is noteworthy for investors with an interest in sustainability. The reported average carbonation of 10% on beneficial use ash is a technical detail that reflects the effectiveness of the company's carbon capture efforts. As environmental regulations tighten and the market increasingly favors green technologies, Stronghold's progress in this area could offer a competitive edge and possibly open up new revenue streams or partnerships.
Moreover, the reduction in construction costs for the second Karbolith suggests scalability in their carbon capture initiatives. This could lead to enhanced ESG (Environmental, Social and Governance) ratings, which are becoming increasingly important to investors and could impact the company's stock valuation in the long term.
Understanding the implications of the hash price and transaction fees on Stronghold's revenue is crucial. The hash price, which is the revenue per terahash per day, is a direct measure of mining profitability. A decline in this metric, as reported, suggests that miners are receiving less compensation for their computational efforts, which can be due to a variety of factors such as changes in network difficulty or a decrease in user transaction fees.
The reported sequential growth in network hash rate indicates a more competitive mining landscape. As more miners join the network or existing miners upgrade their equipment, the difficulty of mining Bitcoin increases, which can dilute individual miners' rewards. This could impact Stronghold's ability to maintain or grow its Bitcoin production without additional investment in more efficient mining technology or an increase in the scale of their operations.
NEW YORK, Feb. 08, 2024 (GLOBE NEWSWIRE) -- Stronghold Digital Mining, Inc. (NASDAQ: SDIG) (“Stronghold” or the “Company”) today provided the following updates regarding its operations and financial performance:
Bitcoin Mining Update
Stronghold mined 192 Bitcoin in January 2024 and generated approximately
The Company generated an estimated
Carbon Capture Update
Stronghold continues to be encouraged by test results from its first Karbolith. The Company has received third-party lab results from 12 additional samples of beneficial use ash that were taken after the Company’s December 2023 investor day. The results demonstrated carbonation of up to
About Stronghold Digital Mining, Inc.
Stronghold is a vertically integrated Bitcoin mining company with an emphasis on environmentally beneficial operations. Stronghold houses its miners at its wholly owned and operated Scrubgrass Plant and Panther Creek Plant, both of which are low-cost, environmentally beneficial coal refuse power generation facilities in Pennsylvania.
Forward Looking Statements of Stronghold:
Certain statements contained in this press release, including guidance, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. Forward-looking statements and the business prospects of Stronghold are subject to a number of risks and uncertainties that may cause Stronghold’s actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things: the hybrid nature of our business model, which is highly dependent on the price of Bitcoin; our dependence on the level of demand and financial performance of the crypto asset industry; our ability to manage growth, business, financial results and results of operations; uncertainty regarding our evolving business model; our ability to retain management and key personnel and the integration of new management; our ability to raise capital to fund business growth; our ability to maintain sufficient liquidity to fund operations, growth and acquisitions; our substantial indebtedness and its effect on our results of operations and our financial condition; uncertainty regarding the outcomes of any investigations or proceedings; our ability to enter into purchase agreements, acquisitions and financing transactions; public health crises, epidemics, and pandemics such as the coronavirus pandemic; our ability to procure crypto asset mining equipment, including from foreign-based suppliers; our ability to maintain our relationships with our third party brokers and our dependence on their performance; our ability to procure crypto asset mining equipment; developments and changes in laws and regulations, including increased regulation of the crypto asset industry through legislative action and revised rules and standards applied by The Financial Crimes Enforcement Network under the authority of the U.S. Bank Secrecy Act and the Investment Company Act; the future acceptance and/or widespread use of, and demand for, Bitcoin and other crypto assets; our ability to respond to price fluctuations and rapidly changing technology; our ability to operate our coal refuse power generation facilities as planned; our ability to develop and monetize our carbon capture project to generate meaningful revenue, on a timely basis or at all; our ability to remain listed on a stock exchange and maintain an active trading market; our ability to avail ourselves of tax credits for the clean-up of coal refuse piles; and legislative or regulatory changes, and liability under, or any future inability to comply with, existing or future energy regulations or requirements. More information on these risks and other potential factors that could affect our financial results is included in our filings with the Securities and Exchange Commission, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our Annual Report on Form 10-K filed on April 3, 2023 and in our subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Any forward-looking statement or guidance speaks only as of the date as of which such statement is made, and, except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements or guidance, whether because of new information, future events, or otherwise.
Contacts:
Stronghold Digital Mining, Inc.
Investor Contact:
Matt Glover or Alex Kovtun
Gateway Group, Inc.
SDIG@gateway-grp.com
1-949-574-3860
Media Contact:
contact@strongholddigitalmining.com
FAQ
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