Stronghold Provides May 2024 Bitcoin Mining and Operational Update

Rhea-AI Summary

Stronghold Digital Mining (NASDAQ: SDIG) released an update for May 2024, highlighting their Bitcoin mining performance and operational status. The company mined 82 Bitcoin and generated approximately $5.2 million in revenue for May, marking a 46% revenue decline from April 2024. The notable decrease was primarily due to the post-halving effect, which reduced Bitcoin block rewards from 6.250 to 3.125. Additionally, a minor 0.8% drop in Bitcoin prices and lower transaction fees, down to 7.4% from April's 25.3%, contributed to the revenue dip. Average hash price for May stood at $0.052 per TH/s per day, compared to $0.095 in April. A slight 1.2% decrease in the network hash rate provided partial counterbalance to these effects.

Positive

• Stronghold mined 82 Bitcoin in May 2024.
• Despite challenges, the network hash rate decreased by 1.2%, providing some relief.

Negative

• Revenue for May 2024 was $5.2 million, a 46% decline compared to April 2024.
• Post-halving operations led to a reduction in Bitcoin block rewards from 6.250 to 3.125.
• Bitcoin prices experienced a slight 0.8% drop in May.
• Transaction fees decreased significantly, averaging 7.4% in May compared to 25.3% in April.
• Average hash price fell from $0.095 per TH/s per day in April to $0.052 in May.

Insights

Financial Analyst

Stronghold Digital Mining's May update reveals a significant 46% drop in revenue compared to April, primarily attributed to the halving event that reduced the Bitcoin block rewards by 50%. This decrease in revenue despite a slight decline in Bitcoin prices (0.8%) and lower transaction fees could indicate challenges in maintaining profitability under the new reward structure. Investors should note that the average hash price fell to $0.052 per TH/s per day from $0.095, reflecting reduced earnings per computational effort.

Understanding the halving's impact is key. The reduction in block reward is a programmed event in Bitcoin's protocol, happening approximately every four years to control inflation. While it typically results in short-term disruptions, it could lead to long-term price increases due to reduced supply. However, Stronghold's operational efficiency and ability to manage costs will be critical in navigating this period.

The slight decline in network hash rate (1.2%) suggests some miners may have become unprofitable and exited the network, potentially reducing competition. Yet, the lower transaction fees (from 25.3% in April to 7.4% in May) further squeeze miner revenues.

For a retail investor, the key takeaway is to monitor Stronghold's cost management and efficiency improvements, as these will determine their ability to sustain operations and profitability in a post-halving environment.

Market Research Analyst

From a market perspective, the post-halving scenario was expected to put pressure on mining revenues, as evidenced by Stronghold's update. The 46% revenue drop underscores the immediate financial impacts that such halving events can have on mining companies. This is a period of adjustment for the industry and miners who can innovate and operate more efficiently will have a competitive advantage.

The reduction in transaction fees is noteworthy. High fees in April may have been an anomaly due to network congestion or specific transaction spikes. The sharp drop in May fees suggests a return to more typical levels, but it also means reduced supplementary income for miners beyond block rewards.

Potential investors should be aware of the volatility in the mining sector, driven by factors like network hash rate fluctuations and changing transaction fees. Investing in companies like Stronghold means betting on their operational agility and strategic responses to these industry shifts.

NEW YORK, June 07, 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 82 Bitcoin in May 2024 and the Company generated an estimated $5.2 million of revenue during May, a decrease of 46% compared to April 2024. The primary driver of the decline was due to the first full month of post-halving operations. Average hash price in May was $0.052 per TH/s per day compared to $0.095 in April, largely due to the halving of Bitcoin block awards from 6.250 to 3.125, a slight decline in Bitcoin price of 0.8%, lower transaction fees averaging 7.4% in May compared to 25.3% in April, and partially offset by a decline in network hash rate of 1.2%.

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 March 8, 2024 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 Alec Wilson
Gateway Group, Inc.
SDIG@gateway-grp.com
1-949-574-3860

Media Contact:
contact@strongholddigitalmining.com

FAQ

How many Bitcoin did Stronghold mine in May 2024?

Stronghold mined 82 Bitcoin in May 2024.

What was Stronghold's revenue for May 2024?

Stronghold's revenue for May 2024 was approximately $5.2 million.

Why did Stronghold's revenue decline in May 2024?

The revenue decline was primarily due to the Bitcoin halving event, lower Bitcoin prices, and reduced transaction fees.

What was the impact of the Bitcoin halving on Stronghold?

The Bitcoin halving reduced block rewards from 6.250 to 3.125, significantly impacting Stronghold's revenue.

How much did the average hash price change in May 2024?

The average hash price in May 2024 was $0.052 per TH/s per day, down from $0.095 in April.