Bitcoin Miner Stronghold Raises Year-End Hashrate Guidance to 4 EH/s

Fourth-quarter revenue of $23.4 million was driven mainly by selling energy to the power grid rather than crypto mining.

AccessTimeIconMar 29, 2023 at 3:27 p.m. UTC
Updated May 9, 2023 at 4:11 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Stronghold Digital Mining (SDIG) raised its year-end bitcoin mining computing power forecast to 4 exahash/second (EH/s) from 3 EH/s, according to a Wednesday statement.

For the fourth quarter, the company's net loss widened 45% to 74 cents per share from the year-earlier quarter.

The company widened its 12-month revenue forecast to between $94 million and $129 million from a previous range of $108 million-$114 million. Mining profitability, which is measured as the hashprice, is seen 7 cents to 10 cents per terahash/second (TH/s) per day. Previously, it said it expected a hashprice of approximately 9 cents/TH/s. An exahash is 1 million terahash.

The miner's shares rose 6% in Wednesday morning trading on the Nasdaq.

Fourth-quarter revenue of $23.4 million was driven mainly by selling energy to the power grid rather than crypto mining. The miner owns two coal plants in Pennsylvania that use coal refuse, or piles of the fossil fuel left behind from the physical mining process.

Bitcoin mining revenue dropped 35% from the previous quarter as Stronghold returned equipment to lenders to lower debt. It also curtailed operations at times of high energy demand to sell power to the grid.

Speaking on the earnings call, Chief Financial Officer Matthew Smith explained that the boosted use of renewable energy has the effect of increasing electricity pricing during some periods and decreasing it during others, and how Stronghold is attempting to work this to its advantage.

"We're creating a grid that is a little bit less stable because we're taking out baseload fossil fuel plants and replacing them with intermittent wind and solar assets," said Smith. "So when power is the cheap [the price] can even go negative."

"We're in a great position to take advantage of what is quickly becoming a new reality on the power market," he added.

In recent months, Stronghold has taken steps to reduce its debt levels. In March it agreed with an electrical contractor to extinguish $11.4 million in exchange for a $3.5 million subordinated note and 3 million penny warrants. In February, the firm also extinguished $16.9 million of principal and $1 million of accrued interest by closing its exchange agreement, under which convertible notes are redeemable by stock. As of March 28, it had $59.8 million in outstanding debt.

Edited by Sheldon Reback.

UPDATE (March 29, 16:45 UTC): Adds comment from CFO.


Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Eliza Gkritsi

Eliza Gkritsi is a CoinDesk contributor focused on the intersection of crypto and AI.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.