James Cirrone

In a move that’s sparked outrage from environmental groups, Stronghold Digital Mining is looking to continue burning tires to fuel its bitcoin mining data center in Nesquehoning, Pennsylvania.&nbsp;



StateImpact Pennsylvania, a reporting project of NPR member stations, <a href="https://stateimpact.npr.org/pennsylvania/2023/08/25/pa-crypto-plant-wants-to-burn-tires-environmental-advocates-ask-regulator-to-say-no/">reported</a> on Stronghold Digital’s plans last Friday, which led to the Clean Air Council issuing a public rebuke on X, formerly Twitter.



“We are calling on state regulators and [the Pennsylvania Department of Environmental Protection] with [Earthjustice] and [PennFuture] to deny a permitting request from Stronghold Digital Mining to burn tires as fuel for its bitcoin mining operations,” the non-profit <a href="https://twitter.com/CleanAirCouncil/status/1696224078602891401">wrote</a> on Monday.&nbsp;



Stronghold Digital told Blockworks that Pennsylvania-based environmental groups like PennFuture and Earthjustice “paint a really inaccurate picture.”



The Pennsylvania-based miner added that it already had a temporary permit from the state’s Department of Environmental Protection (DEP) to use tire-derived fuel, in other words, energy that is produced by burning tire scraps.&nbsp;



“The current application process with DEP is to obtain a permanent permit…to continue to burn the [tire-derived fuel] in the same manner and [in] limited quantity, given [that] several years of testing have proven no adverse effects,” a company spokesperson told Blockworks in an email.&nbsp;



Blockworks reached out to the DEP, PennFuture and Earthjustice for comment, but didn’t receive any responses before publication.&nbsp;



But how bad would burning tires for fuel be? To answer that question, let’s take a closer look at what happens when tires are melted down.&nbsp;



According to the US Environmental Protection Agency (EPA), in uncontrolled tire fires, tires will break down into hazardous materials including “<a href="https://archive.epa.gov/epawaste/conserve/materials/tires/web/html/fires.html">gases, heavy metals and oil</a>.”



That’s not the end of it though, because when burned, tires also produce emissions that contain “polycyclic aromatic hydrocarbons (PAHs), benzene, styrene, phenols and butadiene.” Earthjustice also pointed this out in an Aug. 21 <a href="https://earthjustice.org/press/2023/pennsylvania-residents-urge-dep-to-prevent-panther-creek-from-burning-tires-to-fuel-cryptomining#:~:text=The%20Panther%20Creek%20power%20plant,coal%20they%20use%20to%20produce">press release</a>.



Many of these chemicals have the propensity to cause cancer in humans. Benzene, in particular, has been <a href="https://emergency.cdc.gov/agent/benzene/basics/facts.asp#:~:text=The%20Department%20of%20Health%20and,of%20the%20blood%2Dforming%20organs.">definitively classified</a> as a carcinogen.



Stronghold Digital told Blockworks that random tire fires do not reflect its operations.&nbsp;



At the Nesquehoning location, dubbed the Panther Creek site, the company uses two circulating fluidized bed combustors (CFBs) — a type of boiler — to burn waste coal, a byproduct of coal mining, and tire scraps.&nbsp;



According to <a href="https://www.science.gov/topicpages/c/circulating+fluidized-bed+combustion">Science.gov</a>, CFBs have been known to completely vaporize ventilation air methane from the act of burning coal.



Stronghold Digital collects waste coal from polluted areas in the state with the help of the DEP, a spokesperson told Blockworks. That waste coal is then converted into energy that, in part, is used to mine bitcoin. Some of it is also transferred back to the grid.



Stronghold Digital wants to continue limited use of tire-derived fuel, which it says accounts for less than 7% of the burned material at its 80 megawatt power plant in Nesquehoning.&nbsp;



Additionally, the EPA does in fact <a href="https://nepis.epa.gov/Exe/ZyNET.exe/P1004TZU.TXT?ZyActionD=ZyDocument&amp;Client=EPA&amp;Index=2000+Thru+2005&amp;Docs=&amp;Query=&amp;Time=&amp;EndTime=&amp;SearchMethod=1&amp;TocRestrict=n&amp;Toc=&amp;TocEntry=&amp;QField=&amp;QFieldYear=&amp;QFieldMonth=&amp;QFieldDay=&amp;IntQFieldOp=0&amp;ExtQFieldOp=0&amp;XmlQuery=&amp;File=D%3A%5Czyfiles%5CIndex%20Data%5C00thru05%5CTxt%5C00000021%5CP1004TZU.txt&amp;User=ANONYMOUS&amp;Password=anonymous&amp;SortMethod=h%7C-&amp;MaximumDocuments=1&amp;FuzzyDegree=0&amp;ImageQuality=r75g8/r75g8/x150y150g16/i425&amp;Display=hpfr&amp;DefSeekPage=x&amp;SearchBack=ZyActionL&amp;Back=ZyActionS&amp;BackDesc=Results%20page&amp;MaximumPages=1&amp;ZyEntry=1&amp;SeekPage=x&amp;ZyPURL">support</a> tire-derived fuel as an alternative to fossil fuels. That’s because tires often end up in landfills, and if they catch fire, that could lead to even more disastrous consequences than if a third party had burned them in a controlled manner.



“Disposal of scrap tires in tire piles is not an acceptable management practice because of the risks posed by tire fires,” the EPA <a href="https://nepis.epa.gov/Exe/ZyNET.exe/P1004TZU.TXT?ZyActionD=ZyDocument&amp;Client=EPA&amp;Index=2000+Thru+2005&amp;Docs=&amp;Query=&amp;Time=&amp;EndTime=&amp;SearchMethod=1&amp;TocRestrict=n&amp;Toc=&amp;TocEntry=&amp;QField=&amp;QFieldYear=&amp;QFieldMonth=&amp;QFieldDay=&amp;IntQFieldOp=0&amp;ExtQFieldOp=0&amp;XmlQuery=&amp;File=D%3A%5Czyfiles%5CIndex%20Data%5C00thru05%5CTxt%5C00000021%5CP1004TZU.txt&amp;User=ANONYMOUS&amp;Password=anonymous&amp;SortMethod=h%7C-&amp;MaximumDocuments=1&amp;FuzzyDegree=0&amp;ImageQuality=r75g8/r75g8/x150y150g16/i425&amp;Display=hpfr&amp;DefSeekPage=x&amp;SearchBack=ZyActionL&amp;Back=ZyActionS&amp;BackDesc=Results%20page&amp;MaximumPages=1&amp;ZyEntry=1&amp;SeekPage=x&amp;ZyPURL">wrote</a> in a 2005 memo.



In a 2016 <a href="https://archive.epa.gov/epawaste/conserve/materials/tires/web/html/tdf.html">article</a>, the EPA added that “it is better to recover the energy from a tire rather than landfill it.”



And in the DEP’s copy of a general permit for the disposal of tires, it lays out exactly how tires ought to be used for energy production.



“The permitted beneficial use of whole waste tires, tire chips, baled tires, tire shreds, and crumb rubber is limited to use in recapping, as fuel in boilers or other combustion units,” the permit <a href="https://files.dep.state.pa.us/Waste/Bureau%20of%20Waste%20Management/WasteMgtPortalFiles/SolidWaste/Residual_Waste/GP/WMGR038.pdf">stated</a>.



Updated Aug. 30, 2023 at 3:24 pm ET: Additional context provided by Stronghold Digital regarding operations at its Panther Creek site



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Stronghold Digital wants to burn tires for fuel, environmental groups strike back

Sebastian Sinclair

A federal court in New York has allowed a class action lawsuit to proceed against crypto mining firm Stronghold Digital, over allegations the company misled investors in its initial public offering (IPO).



Lead plaintiff Mark Winter alleges Stronghold&#8217;s registration statement and prospectus contained materially false and misleading information about the company&#8217;s mining operations. That included its ability to generate revenue, according to a court order filed Thursday.



The lawsuit claims Stronghold misled investors about a certain supplier&#8217;s contract failure and the performance of their bitcoin miners, violating sections of the US Securities Act.



Specifically, Winter alleges Stronghold overstated its hash rate, which is a measure of the computing power of its mining equipment, while also understating its costs of production.



As a result of the alleged misrepresentations, plaintiffs argue they suffered damages when they purchased Stronghold stock at an artificially inflated price.&nbsp;



Stronghold first <a href="https://blockworks.co/news/bitcoin-focused-stronghold-digital-mining-files-for-100m-ipo">filed its IPO</a> with the SEC in July 2021 before going public via the Nasdaq stock exchange three months later. Stronghold was initially listed at $26.50 per share under the ticker $SDIG, marking a <a href="https://blockworks.co/news/stronghold-digital-mining-ipo-opens-55-8-above-expected-stock-price">55% increase</a> over the expected range of $16 to $18 per share.&nbsp;



SDIG was up more than 10% on the day to $8.08. The stock is up more than 87% year-to-date alongside most other competitors, though remains down more than 98% from its 2021 peak of $357, exchange data shows.



<h2 class="wp-block-heading">Stronghold’s defense</h2>



The bitcoin miner, along with its key executives, filed a motion to dismiss the lawsuit in December of last year.&nbsp;



“This entire case is premised on the illogical notion that a supplier’s failure to fulfill a contract with a company — subsequent to that company disclosing the risk of that very issue —&nbsp; somehow renders those disclosures materially false and misleading,” the company said in its December motion.



Stronghold acknowledged on Nov. 8, 2021, that it wouldn&#8217;t be able to obtain supplier MinerVa miners in line with the delivery schedule. This was followed by an earnings call on Nov. 30, where the company disclosed it had only 240 MV7 miners on hand but expressed it would receive all 15,000 miners within the first quarter of the following year.&nbsp;



The severity of the delivery problems and the discrepancy in numbers wasn&#8217;t fully revealed until March 2022, according to the filing Thursday.



“Because plaintiffs have identified at least one actionable misstatement or omission in the offering materials, the complaint survives the motion to dismiss,” Judge Ronnie Abrams wrote in the document.



Stronghold did not immediately return a request for comment.



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Stronghold Digital class action to proceed following court approval

Casey Wagner

After a rocky 2022, bitcoin miners could be in for a lucrative year, at least if past market cycle patterns repeat.&nbsp;



The largest cryptocurrency posted a 64% loss last year, coupled with skyrocketing electricity costs around the world and a dramatic drop in mining profitability made 2022 a bust for most of the crypto mining industry. But a rebounding market and upcoming halving cycle could be the catalysts the industry needs for a turnaround.&nbsp;



The next bitcoin halving, expected in the second quarter of 2024, should create a positive imbalance between bitcoin’s supply and demand, <a href="https://medium.com/@cbendiksen?source=---two_column_layout_sidebar----------------------------------" target="_blank" rel="noreferrer noopener">Christopher Bendiksen</a>, bitcoin research lead at CoinShares, said in a <a href="https://blog.coinshares.com/end-in-sight-for-the-mining-capitulation-cycle-e33b9d2fc9b9" target="_blank" rel="noreferrer noopener">report</a> Monday. 



“Historically, there has been a recurring tendency for the halvings to be closely followed by bull markets, leading to the now famed four-year bull/bear cycles in bitcoin price,” Bendiksen said.&nbsp;



When market conditions are strong, miners restrict new supply by holding more bitcoin on their own treasuries, meaning the supply of newly mined bitcoin hitting the market is much smaller than the actual production amount, Bendiksen said. But when there are challenges in the market, miners are forced to liquidate their holdings.&nbsp;



“Because good times in mining tend to happen during bitcoin bull markets, and bad times tend to happen during bear markets, miner hoarding behavior happens right when demand is already overpowering supply, and vice versa,” Bendiksen said. “This adds further fuel to the volatility fire, both to the upside and the downside.”



Some bitcoin mining companies have already reported a stronger start to the year. Riot Platforms increased its production 62% year-over-year last month, the company said in an <a href="https://www.riotplatforms.com/investors/news-events/press-releases/detail/146/riot-announces-january-2023-production-and-operations" target="_blank" rel="noreferrer noopener">unaudited report</a> Monday. Riot reported selling 700 of its 740 mined bitcoin in January 2023, resulting in net proceeds of around $13.7 million, the company said. 



<a href="https://blockworks.co/tag/stronghold-digital-mining">Stronghold Digital Mining</a>, which has been publicly traded since October 2021, has paused all debt payments until July 2024, giving the firm runway for the next 18 months, the company said Tuesday. Holding off on debt payments means Stronghold can take advantage of the current distressed mining market, a spokesperson said. 



After <a href="https://blockworks.co/news/stronghold-loses-25-after-hours-as-q4-earnings-revenue-miss-mark">losing nearly 98% since its Nasdaq debut</a>, Stronghold has rallied more than 30% so far this year. Analysts surveyed by <a href="https://money.cnn.com/quote/forecast/forecast.html?symb=SDIG" target="_blank" rel="noreferrer noopener">CNN Business</a> give Stronghold a buy rating with a median price target of $2 per share, a roughly 257% increase from its current price of around $0.56. 



In yet another consolidation move spurred by the distressed market, mining companies <a href="https://blockworks.co/news/hut-8-halts-bitcoin-mining-facility-amid-energy-dispute">Hut 8</a> and US Bitcoin Corp announced merger plans Tuesday. The two companies will be wholly-owned subsidiaries of the new Hut 8 Corp. Hut 8’s shares will be consolidated five-to-one, per the <a href="https://www.prnewswire.com/news-releases/hut-8-and-us-bitcoin-announce-merger-of-equals-to-create-a-preeminent-digital-asset-mining-hosting-managed-infrastructure-operations-and-high-performance-computing-organization-301740489.html" target="_blank" rel="noreferrer noopener">press release</a>. 



“Once miners are better able to cover ongoing cash needs through mining revenue, the exacerbating effect from treasury liquidations on downside volatility is reduced, removing an ankle weight from the bitcoin price itself,” Bendiksen said. “This in turn has the potential to act as a virtuous cycle.



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Cutting Costs and Joining Forces, Bitcoin Miners Hoping for Rebound

Ben Strack

Stronghold Digital Mining is looking to free up its cash flows on the heels of its chief executive buying about $1 million of stock that has since sunk by about 75%.&nbsp;



The bitcoins the company mines, meanwhile, have hovered for a week in the $16,000 range — the latest indicator of downward pressure for the mining sector.&nbsp;



Stronghold’s solution is to issue a debt-stock swap, which would erase nearly $18 million of the operation’s debt and ensuing interest by floating fresh stock valued at roughly $23 million.&nbsp;



The struggling bitcoin miner had on hand a mere six bitcoins — worth a tick short of $100,000, as of publication — plus $12.4 million of cash with no string attached, through year end. Through Oct. 31 of 2022, the company <a href="https://blockworks.co/news/bitcoin-mining-consolidation-more-bankruptcies-expected-analysts-say">had on hand</a> 62 bitcoins and some $30 million in cash. 



The new equity, a Series C preferred stock option, would give investors the option to convert to <a href="https://blockworks.co/tag/stronghold-digital-mining">Stronghold</a> common stock at $0.40 per share — a slight discount to Stronghold’s (SDIG) Tuesday close of $0.43. The stock was down more than 10% on the day alone and has dropped by about 97% over the last year.  



Stronghold lenders set to opt into the convertible options include Adage Capital, Continental General Insurance Company and Parallaxes Capital, according to public <a href="https://www.sec.gov/ix?doc=/Archives/edgar/data/0001856028/000114036123000031/brhc10046173_8k.htm" target="_blank" rel="noreferrer noopener">disclosures</a>. 



Spokespeople for the companies did not return requests for comment.



<h3 class="wp-block-heading">The latest in a string of efforts</h3>



The move marks the latest effort by a crypto miner to free up cash as bitcoin has traded in a sideways, downward range over the past few weeks.&nbsp;



Stronghold CEO Greg Beard <a href="https://ir.strongholddigitalmining.com/news-releases/news-release-details/stronghold-digital-mining-announces-9-million-private-placement" target="_blank" rel="noreferrer noopener">agreed</a> in September to buy 602,609 shares of his company’s stock at $1.66 — a value of roughly $1 million. Those shares are now worth about a quarter of that.



An unspecified institutional investor around the same time snapped up five million shares of Stronghold for $1.60 per share. Proceeds were earmarked for “general corporate purposes,” including buying bitcoin mining rigs.



The chief executive’s buy came about a month before Stronghold finished extinguishing roughly $67 million of debt in October tied to equipment financed by NYDIG and the Provident Bank by returning 26,000 bitcoin miners.&nbsp;&nbsp;&nbsp;&nbsp;



Beard, in a statement at the time, said the company was planning on “opportunistically” building its mining capabilities back up and would look to “improve financial flexibility in what remains a dynamic, challenging market.”



<h3 class="wp-block-heading">A struggling sector</h3>



The move comes as industry watchers are <a href="https://blockworks.co/news/more-crypto-miner-bankruptcy-2023">eyeing</a> the likely possibility that even more crypto miners go bankrupt in 2023.&nbsp;



The deal is intended to allow Stronghold to free up cash to keep its business lines humming through an extended crypto winter — by alleviating some of the pain from coughing up interest on its substantial amount of debt.&nbsp;



“This is a necessary move to preserve cash, reduce our financial obligations, and when coupled with our ability to sell power, better position the company to survive a potentially prolonged crypto market downturn,” CEO Greg Beard told Blockworks via email.



The agreement is expected to close in February, at which point the company expects to have less than $55 million in total principal amount of outstanding debt.



Core Scientific <a href="https://blockworks.co/news/compute-norths-business-goes-south">filed for bankruptcy</a> last month after data center operator Compute North lodged its own <a href="https://blockworks.co/news/compute-norths-business-goes-south">bankruptcy</a> in September.



Argo Blockchain, which <a href="https://blockworks.co/news/argo-bankruptcy-still-on-the-table">warned</a> last month of holding “insufficient cash,” <a href="https://blockworks.co/news/bitcoin-miner-argo-to-sell-largest-facility-to-stay-afloat-stock-doubles">said</a> last week that it is selling its flagship Texas-based Helios plant to Galaxy Digital for $65 million.



&#8220;The market is currently under a huge amount of stress, so comprehensive alignment among existing Stronghold shareholders and the noteholders is critical, and this agreement brings that,” Beard said.



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Bitcoin Miner Stronghold Moves To Erase $18M in Debt as CEO’s Shares Plummet

<div id="highlights-block_6369589c19e80" class="highlights">
 
</div>



A range of bitcoin miners are set to report third quarter results in the coming days as several companies in the mining sector are struggling to cope with financial pressures. 



Marathon Digital, Stronghold Digital Mining and Hut 8 Mining are among the companies in the space set to host earnings calls this week.&nbsp;



While analysts are not necessarily expecting big pronouncements of bankruptcies or acquisitions during industry players’ upcoming calls, they will be listening for how mining executives intend to navigate the current environment.



“I’m always listening for cues on expectations — company-specific and industry-specific — and specific companies’ moves to address their expectations,” Kevin Dede, senior technology analyst at HC Wainwright &amp; Co. told Blockworks.



<a href="https://cms.blockworks.co/crypto-miner-consolidation-imminent-as-some-industry-players-struggle/" target="_blank" rel="noreferrer noopener">Industry watchers told Blockworks</a> earlier this month that miner consolidation is imminent, as some of the larger miners in the space could look to scoop up struggling companies and their assets. 



But Lucas Pipes, managing director at B. Riley Securities, said miners in a solid financial situation are still likely to take a wait-and-see approach.&nbsp;



“They want to make sure they’re all secured and shored up and build that treasure chest to the extent they can,” he said. “Are you going to have exceptions to this rule? Yeah, you might.”



<h3 class="wp-block-heading">Keeping bitcoin mining rigs humming during crypto winter </h3>



Core Scientific revealed in <a href="https://d18rn0p25nwr6d.cloudfront.net/CIK-0001839341/5d07f815-c426-4db9-b79a-a38d616cf35a.pdf" target="_blank" rel="noreferrer noopener">filings</a> last month <a href="https://cms.blockworks.co/core-scientific-stock-price-plummets-70-as-it-considers-bankruptcy/" target="_blank" rel="noreferrer noopener">it was considering bankruptcy</a>, and Argo Blockchain followed by saying a potential capital injection of $27 million it was expecting <a href="https://cms.blockworks.co/crypto-miner-consolidation-imminent-as-some-industry-players-struggle/" target="_blank" rel="noreferrer noopener">had fallen through</a>. 



“The space is distressed,” Pipes said. “There’s no other way of putting it.”&nbsp;



Dede added that as it becomes harder to raise money in public markets, miners are being forced to purge assets.&nbsp;



Core Scientific said Monday that it sold 2,285 bitcoins at an average price of $19,639, as proceeds totaled roughly $45 million. The company held 62 BTC and about $32 million in cash, as of Oct. 31.



Core Scientific and Argo Blockchain have not yet listed earnings call dates.&nbsp;



Iris Energy is <a href="https://cms.blockworks.co/bitcoin-miner-iris-energy-says-its-bad-debt-contained-in-rotten-arms/" target="_blank" rel="noreferrer noopener">also in financial distress</a>. The Australia-based bitcoin miner said in an SEC filing last week that it can generate $2 million in monthly gross profit by mining bitcoin, while monthly principal and interest repayments on its debt stands at $7 million.



Bom Shin, vice president of corporate finance at Iris Energy, told Blockworks last week that the company’s debt is structured within a number of special-purpose vehicles (SPVs), which had a market value worth about 35% less than its principal loans outstanding as of September’s end.



The company was engaged in ongoing discussions with its unnamed lender, Shin added.



Iris Energy said that if it is unable to restructure the loans, two of its SPVs would have to default on the loans, which would likely result in the lenders foreclosing on the mining rig collateral, according to a Nov. 3 research note by Compass Point Research and Research analysts Chase White and Joe Flynn.



The analysts added that while Iris Energy’s stock price dropped following the news — and that the company may have a hard time getting equipment-backed financing in the future — they believe the company will be in a better financial situation after its negotiations with its lenders.



“We believe the market misunderstands the implications of the situation, which we see as a potentially significant positive for [Iris] that will allow it to continue to operate without the burden of expensive debt,” White and Flynn said.&nbsp;



In addition to the more recent struggles in the space, crypto mining data center operator <a href="https://cms.blockworks.co/compute-norths-business-goes-south/" target="_blank" rel="noreferrer noopener">Compute North filed for bankruptcy</a> in Texas in September.



Dede said he expects it will take a bit more pressure before more bankruptcies and consolidation take shape.



“You can expect to see some suffering for a while, I think,” he added. “I’m in no position to say how long this bear market lasts, but people who are running these companies should position themselves to endure a lengthy one.”



<h3 class="wp-block-heading">The space’s potential acquirers could wait to buy&nbsp;</h3>



Marathon Digital posted <a href="https://cms.blockworks.co/crypto-miner-marathon-digital-posts-192m-net-loss-in-q2/" target="_blank" rel="noreferrer noopener">a net loss of $192 million</a> during the second quarter and is set to report its third quarter earnings on Tuesday at 4:30 p.m. ET. 



The company said on Nov. 2 that it added about 32,000 miners last month to raise its hashrate to roughly 7 exahashes per second (EH/s). It also produced a record 615 bitcoins in October, increasing its total holdings to 11,285 BTC.



Marathon seeks to hit roughly 13 EH/s by the end of 2022 and 23 EH/s by mid-2023, Marathon CEO Fred Thiel told Blockworks.



Thiel said last month that Marathon would keep an eye on cheap assets from struggling miners. He noted that the company could look to purchase a hosting site, for example, if such a buy made strategic sense.



Riot Blockchain is another company that has expressed interest in acquisitions, as CEO Jason Les called his firm <a href="https://cms.blockworks.co/riot-blockchain-ceo-firm-is-one-of-mining-spaces-best-positioned-acquirers/" target="_blank" rel="noreferrer noopener">one of the segment’s “best-positioned acquirers.”</a>



The company produced 509 bitcoins in October and held 6,825 BTC, as of Oct. 31. It seeks to reach 12.5 EH/s during the first quarter of 2023. Riot has a special meeting of stockholders set for Nov. 17.



Frank Holmes, executive chair of HIVE Blockchain Technologies, <a href="https://cms.blockworks.co/ex-eth-miner-hive-blockchain-eyes-buying-opportunities-post-merge/" target="_blank" rel="noreferrer noopener">told Blockworks</a> in September that his firm would be evaluating buys of equipment, and potentially mining firms, over the next six months. 



Cleanspark said on Nov. 1 that it acquired 3,843 units of Antminer S19J Pro bitcoin mining machines for $5.9 million. The machines appeared to have come from Argo Blockchain, which reported selling the same number of S19J Pro units last week.&nbsp;



Pipes said though he believes “we’re getting close” to seeing more mergers and acquisitions in the space, there are often relatively few operational synergies to take advantage of.&nbsp;



He added that Riot is likely in the best financial situation of any miner, while Marathon is also in a position to take advantage of opportunities. But, he noted, those companies may want to focus on their ambitious hashrate targets.



“I think it’s first things first — execute on the existing growth plan before you take precious capital to add in more growth that may not be as attractive as what you have planned for anyways” Pipes said.&nbsp;



<h3 class="wp-block-heading">Other miners to keep an eye on</h3>



After Marathon’s earnings call on Tuesday, Stronghold Mining and Hut 8 Mining are scheduled to host their own on Wednesday at 5:00 p.m. ET and Thursday at 10:00 a.m. ET, respectively.&nbsp;



Canada-based miner Bitfarms is set to report its third quarter results on Nov. 14 at 11 a.m. ET



Stronghold said last week that it eliminated all outstanding principal — totaling about $67 million — under its equipment financing agreements with NYDIG and The Provident Bank.&nbsp;



Stronghold CEO Greg Beard said in a statement that the company was rapidly deleveraging its balance sheet and enhancing liquidity to pursue acquisitions of bitcoin miners at attractive prices. Stronghold had roughly $30 million of liquidity in cash and bitcoin, as of Nov. 1.



Meanwhile, Hut 8 Mining produced 299 bitcoins in October to raise its holdings total to 8,687 BTC. Its installed hashrate capacity was 3.07 EH/s at the end of the month.



Hut 8 CEO Jaime Leverton said during Blockworks’ Digital Asset Summit in September that acquisitions are not necessarily the best thing in the current market environment, as the company can buy new machines at attractive prices.



Bitfarms, <a href="https://cms.blockworks.co/crypto-miner-bitfarms-sells-half-its-bitcoin-to-reduce-debt-boost-liquidity/">which resorted to selling bitcoin</a> earlier this year, mined 486 BTC in October and sold all of it.



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What To Expect on Miners’ Q3 Earnings Calls As Industry Remains ‘Distressed’

<div id="highlights-block_6227b74b85b0c" class="highlights">
 <ul>
 <li>Marathon Digital expects to have 199,000 bitcoin miners producing approximately 23.3 EH/s by early 2023</li>
 <li>Stronghold Digital Mining, which owns its power, seeks to buy additional plants and scale its mining equipment and operations this year</li>
 </ul>
 
</div>



Cryptocurrency miners will diversify their revenue streams and business models from one another this year, according to Compass Point Research and Trading.&nbsp;



The cryptocurrency research firm estimates the global hashrate will rise to 327 exahashes per second (EH/s) by the end of 2022 — a nearly 60% year-over-year increase, <a href="https://compasspoint.bluematrix.com/links2/secure/pdf-viewer/36c024b3-5d83-4e8c-af91-e7c207a26a67" target="_blank" rel="noreferrer noopener">according to a note</a> by Chase White. Hashrate could reach 587 EH/s by the end of next year, he added.



“While we believe our hash rate growth estimate is relatively aggressive compared to consensus, we see it as a more conservative approach given that miner revenues and per-BTC costs are directly related to global hash rate share, potentially suggesting upside to our estimates if growth is lower than expected,” White wrote.



Bitcoin traded around $38,800 at 2 pm ET on Tuesday.



Compass Point expects bitcoin prices to average roughly $49,000 this year — ending the year at $65,000 — and rise to an average of $81,000 in 2023. The expected rise is driven in part by BTC’s resilience during Russia’s invasion of Ukraine and expected increased adoption globally, especially among retail investors, White wrote.



“We do not believe all miners are created equal, and we believe 2022 is the year that investors will start to look at the differentiators between the companies and their businesses,” he wrote. &#8220;These factors lead us to favor Marathon (MARA) among the scaled miners and Stronghold Digital Mining (SDIG) among the small miners.&#8221;



<h3 class="wp-block-heading">Marathon versus Riot Blockchain</h3>



Marathon has 35,510 active miners producing approximately 3.8 EH/s, the company reported last week. It increased hash rate 8% from the prior month after deploying 2,800 miners.



Marathon mined 360.3 bitcoins in February — a 730% increase from 43.4 bitcoins in February 2021. The company now holds 8,956 bitcoins, currently valued at nearly $350 million.



While many miners are going the vertically integrated route by owning infrastructure and power sources, Marathon has taken the opposite tactic, according to Charlie Schumacher, vice president of corporate communications.



The company owns its machines but partners with other companies that provide infrastructure, as well as power companies that offer primarily renewable energy, he said. Buying infrastructure was not an attractive return on Marathon’s investment, Schumacher said.



“We could have spent $750 million to build a data center, but instead we spent $750 million to go out and buy machines and increase our hashrate,” Schumacher said. “We would rather buy assets that generate revenue than own assets that don’t.”



Hut 8 Mining, a company not included in Compass Point’s report, recently acquired five data centers as it looks to <a href="https://cms.blockworks.co/bitcoin-miner-targets-gaming-web3-with-cloud-services-expansion/" target="_blank" rel="noreferrer noopener">build out its cloud computing business</a>.



Marathon’s focus this year is to deploy the miners it has purchased. Marathon expects to have 199,000 bitcoin miners producing approximately 23.3 EH/s by early 2023, Schumacher said, and expects its mining operations to be 100% carbon neutral by the end of 2022.



The company’s status as a scaled miner with ample access to capital likely gives it the first look at any available hosting capacity, White wrote. He lowered Riot Blockchain’s rating from buy to neutral, noting that Marathon offers better upside.



Riot produced 436 bitcoins in February, bringing the total it holds to 5,783 BTC, the company reported last week. Riot, which has a fleet of 38,310 miners with a hashrate of 3.9 EH/s, anticipates a total self-mining hash rate capacity of 12.8 EH/s by January 2023.



As for other miners featured in the report, Compass Point retained its buy rating for Argo Blockchain and downgraded its rating for Iris Energy from buy to neutral.



<h3 class="wp-block-heading">Stronghold’s 2022 focuses</h3>



Compass Point’s preference of Stronghold compared to fellow smaller miners is driven by its relatively low power costs, diversified revenue streams and low-cost options on additional power capacity.



“We acknowledge there is execution risk on the path to capacity,” White wrote.



The company, which <a href="https://cms.blockworks.co/stronghold-digital-mining-ipo-opens-55-8-above-expected-stock-price/" target="_blank" rel="noreferrer noopener">went public last year</a>, generates power from the waste byproduct of legacy coal mining operations. It’s focused on maximizing the benefits of owning its power, which is typically the largest cost for miners.



“In owning our own power assets, we can continue to grow our mining operations and clean up the environment at the same time,” Stronghold CEO Greg Beard told Blockworks in an email. “It also allows us to stabilize the electricity grid in the region at a time of questionable energy security, not just locally and regionally, but globally.”



The company acquired its second plant, the Panther Creek Energy Facility in Pennsylvania, last November. It reported having about 14,000 miners with 1.3 EH/s of capacity in January.&nbsp;



“We are plugging in miners and expanding our mining power as fast as we can,” Beard said. “That will truly unlock the growth potential of our vertically integrated operation, as we will have the lowest cost of power in the industry.”



<hr class="wp-block-separator has-alpha-channel-opacity"/>



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Bitcoin Mining Operators Jostling for Market Share in 2022

Jacquelyn Melinek

<div id="highlights-block_6170603c9df82" class="highlights">
 <ul>
 <li>“Unlike traditional Bitcoin or crypto miners that seek out cheap power, what we really looked for was a way to enhance and sustain the power business by utilizing cryptocurrency,” William Spence, co-chairman at Stronghold, said in an interview with Blockworks</li>
 <li>The company has about 3,000 crypto miners and plans to gain an additional 26,150 miners from three suppliers by the end of 2022</li>
 </ul>
 
</div>



Stronghold Digital Mining, a crypto mining company that converts coal waste into energy to mine bitcoin, began trading after its initial public offering (IPO) launched on the Nasdaq Global Market Wednesday.



The company’s IPO priced in 55.8% higher than the anticipated range between $16 and $18 price per share with an opening price of $26.50 under the ticker $<a href="https://www.cnbc.com/quotes/SDIG?qsearchterm=SDIG" target="_blank" rel="noreferrer noopener">SDIG</a>. The bitcoin-friendly mining company’s stock price rose as much as 67.8% following its IPO launch at Nasdaq on Wednesday. The stock was up $10.89, or 57.32%, to $29.89 as of 2:40 pm ET.&nbsp;



Although this is an IPO, it comes at a time when the US Securities and Exchange Commission has approved the <a href="https://cms.blockworks.co/proshares-bitcoin-futures-based-etf-to-begin-trading-tuesday/" target="_blank" rel="noreferrer noopener">ProShares Bitcoin Strategy ETF</a> (BITO), marking a milestone for the crypto community as it receives the first government-approved Bitcoin ETF in the US.&nbsp;



As crypto regulation remains a hot topic, Stronghold isn’t worried about regulators, but actually worked with them to launch their IPO, Gregory Beard, co-chairman and CEO of Stronghold said in an interview with Blockworks after the IPO launch.&nbsp;



<div class="wp-block-image"><figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="500" height="333" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/mo_101821-218.jpg" alt="" class="wp-image-9658" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/mo_101821-218.jpg?w=500 500w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/mo_101821-218.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/mo_101821-218.jpg?w=386 386w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/mo_101821-218.jpg?w=392 392w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/mo_101821-218.jpg?w=329 329w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/mo_101821-218.jpg?w=80 80w" sizes="(max-width: 500px) 100vw, 500px" /><figcaption>The Stronghold Digital Mining Team and their families.</figcaption></figure></div>



“Crypto mining has not been the focus of the regulators from our perspective. I don’t feel like we have regulatory risk, given that we are not acting with a financial capacity with the general public,” Beard said.&nbsp;



Beard believes that it’s still early for adoption of bitcoin as a transaction, but it has already been well established as a store of value. The company has about 3,000 crypto miners and plans to gain an additional 26,150 miners from three suppliers by the end of 2022.&nbsp;



“Regulation has some appeal to us because we do a professional business in a legitimate manner and if anything I feel like we’re helping to legitimize this infant industry,” William Spence, co-chairman at Stronghold, said during the interview with Blockworks.&nbsp;



The bitcoin-focused mining company is better known for its environmentally-friendly tactics of using waste coal material to power crypto mining equipment through specialized technology at the company’s power generation facility, Blockworks previously <a href="https://cms.blockworks.co/bitcoin-based-stronghold-digital-mining-expects-valuation-around-1b-ahead-of-ipo/" target="_blank" rel="noreferrer noopener">reported</a>.&nbsp;



“We think that the future of (crypto) mining is integration with power,” Beard said.&nbsp;



The company is anticipating expansion to two more plants with its acquisition of the Panther Creek Energy Facility back in <a href="https://cms.blockworks.co/stronghold-digital-mining-raises-74m-plans-to-buy-second-power-plant/" target="_blank" rel="noreferrer noopener">August</a>, as well as recent plans to acquire another plant.&nbsp;



“Unlike traditional Bitcoin or crypto miners that seek out cheap power, what we really looked for was a way to enhance and sustain the power business by utilizing cryptocurrency,” William Spence, co-chairman at Stronghold, said during the interview with Blockworks.&nbsp;



Stronghold will use proceeds from the IPO for general purposes, including acquisitions of miners and power generating assets to mine more bitcoin, a US Securities and Exchange Commission <a href="https://www.sec.gov/Archives/edgar/data/0001856028/000156459021050660/sdmi-s1a.htm" target="_blank" rel="noreferrer noopener">filing</a> from October 13 stated. 



Casey Wagner contributed to the reporting on this story.

Stronghold Digital Mining IPO Opens 55.8% Above Expected Stock Price

<div id="highlights-block_6166ede0063f4" class="highlights">
 
</div>


<div id="highlights-block_6166ee16063f5" class="highlights">
 <ul>
 <li>“Stronghold LLC will use such proceeds for general corporate purposes, including acquisitions of miners and power generating assets and to pay the expenses of this offering,” the filing said</li>
 <li>The stock will be on the Nasdaq Global Market under the ticker $SDIG and is expected to list next week</li>
 </ul>
 
</div>



Stronghold Digital Mining, a bitcoin-focused mining company powered by coal waste material, released a preliminary prospectus for its initial public offering with a valuation of around $1 billion, according to a filing with the US Securities and Exchange Commission on Wednesday.&nbsp;



Stronghold plans to raise $100 million through offering 5,882,352 shares of its Class A common stock at a range between $16 and $18 price per share, the <a href="https://www.sec.gov/Archives/edgar/data/0001856028/000156459021050660/sdmi-s1a.htm">S-1/A form</a> showed. The stock will be on the Nasdaq Global Market under the ticker $SDIG and is expected to list next week.&nbsp;



B. Riley Securities and Cowen are the joint book-running managers for the deal, it stated. Separately, Tudor, Pickering, Holt &amp; Co. is serving as lead manager and D.A. Davidson &amp; Co., Compass Point, and Northland Capital Markets are acting as co-managers for the proposed offering.



Stronghold declined to comment directly about the S1-form or IPO, a spokesperson told Blockworks via email.&nbsp;



“Stronghold LLC will use such proceeds for general corporate purposes, including acquisitions of miners and power generating assets and to pay the expenses of this offering,” the filing said.



Stronghold’s filing was vetted by the US SEC in a “traditional manner” as opposed to filing a direct listing like Coinbase did, which marks a milestone in the crypto world, a source close to the matter said. This IPO is occurring at a time when US regulators are cracking down on crypto companies, demanding tighter or more clear regulation on companies offering digital assets to investors. 



<h3 class="wp-block-heading">Stronghold&#8217;s history</h3>



The company was founded in 2021 and has raised about $179 million in capital to date. If it raises $100 million through the IPO, that will increase its total capital raised to $279 million.&nbsp;



Stronghold uses waste coal material to power crypto mining equipment using specialized technology at the company’s power generation facility, the Scrubgrass Generating Plant, based in Venango County, Pa., and is planning to expand to a second plant after acquiring the Panther Creek Energy Facility back in August, Blockworks previously <a href="https://cms.blockworks.co/stronghold-digital-mining-raises-74m-plans-to-buy-second-power-plant/" target="_blank" rel="noreferrer noopener">reported</a>. According to the filing on Wednesday, the company is also looking to acquire an additional coal refuse power generation facility and is in a non-binding letter of intent to purchase it.&nbsp;



“We are committed to generating our energy and managing our assets sustainably, and we believe that we are one of the first vertically integrated crypto asset mining companies with a focus on environmentally-beneficial operations,” the company said in the filing. “Simply put, we employ 21st century crypto mining techniques to remediate the impacts of 19th and 20th century coal mining in some of the most environmentally neglected regions of the United States,” the company added.&nbsp;



The bitcoin-focused company currently operates about 3,000 crypto mining computers, or miners, with a hashrate capacity of approximately 185 petahash per second, it said. The company has entered agreements with three suppliers to buy 26,150 additional miners to raise its total hashrate capacity to over 2,500 petahash per second.&nbsp;



“Of these miners, 72% are scheduled to be delivered in 2021, with the next batch scheduled for delivery in October 2021, 21% are scheduled to be delivered in the first quarter of 2022, and the remaining 6% are scheduled to be delivered during the remainder of 2022,” the company stated.

Bitcoin-based Stronghold Digital Mining Expects Valuation Around $1B Ahead of IPO

<div id="highlights-block_6109450722598" class="highlights">
 <ul>
 <li>About $40 million of the investment came from WhiteHawk Capital Partners, a private credit investment management company, and the remaining $34 million was financed by Arctos Credit, an affiliate of NYDIG. </li>
 <li> To date, the company has raised about $179 million in capital</li>
 </ul>
 
</div>



Stronghold Digital Mining raised about $74 million in lease financing to fund purchases of bitcoin miners and to scale its expansion with a second power plant, the company said in a statement.&nbsp;



About $40 million of the investment came from WhiteHawk Capital Partners, a private credit investment management company, and the remaining $34 million was financed by Arctos Credit, an affiliate of <a href="https://cms.blockworks.co/nydig-and-ncr-bringing-bitcoin-to-the-people/" target="_blank" rel="noreferrer noopener">NYDIG</a>. To date, the company has raised about $179 million in capital.&nbsp;



The company acquired a second power plant, Panther Creek Plant, to continue their efforts to clean up the state, a spokesperson told Blockworks in an email. “We see bitcoin as the vehicle to do urgently needed environmental cleanup. Bitcoin is solving a wide array of problems, and investors are showing interest in the crypto space,” a spokesperson said.



<div class="wp-block-image"><figure class="aligncenter size-large"><img loading="lazy" decoding="async" width="512" height="384" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Stronghold-Panther-.jpeg" alt="Stronghold digital mining Panther creek site" class="wp-image-6102" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Stronghold-Panther-.jpeg?w=512 512w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Stronghold-Panther-.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Stronghold-Panther-.jpeg?w=343 343w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Stronghold-Panther-.jpeg?w=348 348w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Stronghold-Panther-.jpeg?w=292 292w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Stronghold-Panther-.jpeg?w=80 80w" sizes="(max-width: 512px) 100vw, 512px" /><figcaption>Coal waste at Panther Creek Plant in Carbon County, Pa. </figcaption></figure></div>



The company uses waste coal, also known as coal waste, the material left behind from traditional coal mining operations to power its crypto mining equipment. Prior to this announcement, Stronghold had one power generation facility in Venango County, Pa.&nbsp;



The definitive agreement to purchase the Panther Creek Plant brings Stronghold’s total net capacity to 165 megawatts (MW), but the acquisition is still subject to customary closing conditions and regulatory approvals, it said.



The second plant is based in Carbon County, Pa. and has a generation capacity of 80 MW. A megawatt is equal to <a href="https://www.nj.gov/emp/energy/faq.html" target="_blank" rel="noreferrer noopener">1,000 kilowatts</a> and the average home only uses two to four kilowatts. Although this facility will be used to power bitcoin miners, for reference purposes the power capacity of this plant has the capacity to power 20,000 to 40,000 homes.&nbsp;



“A second plant allows us to exponentially increase our impact, and expand our cleanup efforts in another area in the state. It will also increase our power potential, allowing us to fit in more bitcoin miners, and further increase our capability to continue our efforts,” a spokesperson said.



The financings will allow the company to expand its operations and mine bitcoin at “at some of the lowest costs in the industry while making a transformational contribution to the environment,” said Greg Beard, CEO and co-chairman of Stronghold.&nbsp;



Coal refuse sites continue to wreak havoc across Pennsylvania, Beard said. The Pennsylvania region and other nearby regions that have been impacted by coal waste provides the facility with what was once unusable waste material and gives it the ability to <a href="https://cms.blockworks.co/stronghold-raises-105m-to-power-bitcoin-mining-with-coal-waste/" target="_blank" rel="noreferrer noopener">convert it into energy for bitcoin</a>, while reclaiming the land, Stronghold previously told Blockworks.



To date, Stronghold has reclaimed over 1,000 acres, and for each bitcoin mined by the plant, an estimated 200 tons of waste coal was eliminated, according to the company.&nbsp;



In general, many mining firms are moving <a href="https://cms.blockworks.co/bitmain-sells-30k-miners-to-marathon-digital-for-120m/" target="_blank" rel="noreferrer noopener">operations</a> from China to North America, after Beijing banned bitcoin mining in June. The “great mining migration” out of China has become a decentralizing force and drive in moving a sizable portion of mining companies to North America in search of new homes for mining facilities, Blockworks previously <a href="https://cms.blockworks.co/bit-digital-cashes-in-on-chinese-mining-exodus/" target="_blank" rel="noreferrer noopener">reported</a>.



With China exiting the mining sector, the increased demand for readily available power has put those companies with power ahead, a spokesperson for Stronghold said.&nbsp;



“We now have an opportunity for miners to pick up some equipment that is either coming out of China, or that may have been originally destined for China,” the spokesperson said. “The crackdown in China has created a huge vacuum for American miners to gain access to mining equipment, which is a large hurdle for many miners.”&nbsp;



<h3 class="wp-block-heading">Busy times for bitcoin mining</h3>



In late July, the company announced its plan for an initial public offering to raise up to <a href="https://cms.blockworks.co/bitcoin-focused-stronghold-digital-mining-files-for-100m-ipo/" target="_blank" rel="noreferrer noopener">$100 million</a> and list its Class A common stock on the Nasdaq Global Market, according to a filing with&nbsp; the US Securities and Exchange Commission. Stronghold declined to comment directly about the S1-form or IPO, a spokesperson told Blockworks via email at the time.&nbsp;



“Our current focus is on mining bitcoin, which we may convert to USD to the extent necessary to fund our development,” the company said in the filing. While the company is focused on bitcoin, it said it may utilize its miners for other crypto assets depending on market conditions, Blockworks previously <a href="https://cms.blockworks.co/bitcoin-focused-stronghold-digital-mining-files-for-100m-ipo/" target="_blank" rel="noreferrer noopener">reported</a>.&nbsp;



In late June, the company fundraised a <a href="https://cms.blockworks.co/stronghold-raises-105m-to-power-bitcoin-mining-with-coal-waste/" target="_blank" rel="noreferrer noopener">previous $105 million</a> from two private placements of equity securities and investors were granted registration rights that require a future public listing, it said. Investors include MG Capital, a number of family offices and Greg Beard, the company’s co-chairman and CEO.



Since April 1, the company entered into definitive agreements with multiple suppliers to purchase over 27,300 miners with a total hash capacity equal to over 2,600 petahash, a spokesperson said. Of those miners, 92% are scheduled to be delivered in 2021 with the first round scheduled for delivery in August. The remaining 8% of miners will be delivered throughout 2022, the company said.



In the future, Stronghold hopes to expand as much as they can while working closely with the state to continue cleaning up waste, a spokesperson said. 



Want more investor-focused content on digital assets? <a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a> September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket. <a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.

Stronghold Digital Mining Raises $74M, Plans to Buy Second Power Plant

<div id="highlights-block_61004148bc997" class="highlights">
 <ul>
 <li>The company currently operates about 3,000 crypto-asset mining computers with hashrate capacity of about 100 petahash</li>
 <li>In late June, the company fundraised $105 million from two private placements of equity securities and investors were granted registration rights that require a future public listing</li>
 </ul>
 
</div>



Stronghold Digital Mining, a digital asset mining company powered by alternative energy, filed an S-1 form for an initial public offering with the US Securities and Exchange Commission on Tuesday.&nbsp;



The company plans to raise up to $100 million and list its Class A common stock on the Nasdaq Global Market under the ticker $SDIG. The filing did not disclose the price per share.



Stronghold declined to comment directly about the S1-form or IPO, a spokesperson told Blockworks via email.&nbsp;



“Our current focus is on mining bitcoin, which we may convert to USD to the extent necessary to fund our development,” the company said in the filing. While the company is focused on bitcoin, it said it may utilize its miners for other crypto assets depending on market conditions.



Stronghold uses waste coal material to power crypto mining equipment using specialized technology at the company’s power generation facility, the Scrubgrass Generating Plant, based in Venango County, Pa.



In late June, the company fundraised $105 million from two private placements of equity securities and investors were granted registration rights that require a future public listing, it said. Investors include MG Capital, a number of family offices and Greg Beard, the company’s co-chairman and CEO, Blockworks previously <a href="https://cms.blockworks.co/stronghold-raises-105m-to-power-bitcoin-mining-with-coal-waste/" target="_blank" rel="noreferrer noopener">reported</a>. 



Stronghold currently operates about 3,000 crypto-asset mining computers with hashrate capacity of about 100 petahash. As of April 1, the company entered into definitive agreements with suppliers to purchase an additional 27,300 miners for a total hash capacity equal to over 2,600 petahash.



About 92% of those miners are scheduled to be delivered in 2021 and it anticipates its total hashrate capacity to be approximately 3,000 petahash by the end of the year. The remaining 8% of miners will be delivered throughout 2022, and will increase the petahash 76.67% to 5,300 petahash year-on-year by December 2022, it said.

Bitcoin-Focused Stronghold Digital Mining Files For $100M IPO

<div id="highlights-block_60d1f2bc5eee5" class="highlights">
 <ul>
 <li>Investors include MG Capital, various family offices, and Greg Beard, who is Stronghold’s co-chairman and CEO.</li>
 <li>To date, over 1,000 acres have been reclaimed and for each bitcoin mined by the plant, an estimated 200 tons of waste coal is eliminated, according to the company</li>
 </ul>
 
</div>



Stronghold Digital Mining, a digital asset mining company powered by alternative energy, announced its $105 million funding round in a statement on June 22.&nbsp;



The fundraising comes from two private placements of equity securities and investors were granted registration rights that require a future public listing, it said. Investors include MG Capital, a number of family offices and Greg Beard, the company’s co-chairman and CEO. 



This news comes at a time when government officials and businessmen have called for crackdowns or better alternatives to cryptocurrency mining.



Bitcoin mining and its environmental impact has been a popular conversation in mainstream news as Tesla CEO Elon Musk <a href="https://cms.blockworks.co/crypto-industry-skeptical-on-musks-bitcoin-u-turn/" target="_blank" rel="noreferrer noopener">tweets</a> about environmental concerns and countries like China have <a href="https://cms.blockworks.co/china-mining-exodus-seen-as-positive-for-bitcoin/" target="_blank" rel="noreferrer noopener">cracked down</a> on its country’s mining industry. 



Stronghold uses waste coal material to power crypto mining equipment using specialized technology at the company’s power generation facility, the Scrubgrass Generating Plant, based in Venango County, Pa., a spokesperson told Blockworks. 



<figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="710" height="458" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/06/pasted-image-0-1.jpg" alt="Stronghold power generation facility" class="wp-image-5021" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/06/pasted-image-0-1.jpg?w=710 710w, https://blockworks-co.imgix.net/wp-content/uploads/2021/06/pasted-image-0-1.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/06/pasted-image-0-1.jpg?w=398 398w, https://blockworks-co.imgix.net/wp-content/uploads/2021/06/pasted-image-0-1.jpg?w=405 405w, https://blockworks-co.imgix.net/wp-content/uploads/2021/06/pasted-image-0-1.jpg?w=339 339w, https://blockworks-co.imgix.net/wp-content/uploads/2021/06/pasted-image-0-1.jpg?w=80 80w" sizes="(max-width: 710px) 100vw, 710px" /><figcaption>Stronghold’s power generation facility, the Scrubgrass Generating Plant, Venango County, Pa.</figcaption></figure>



Waste coal, also known as coal waste, is material left behind from traditional coal mining.



“This model shows that crypto mining can be beneficial to the environment it is in. Without crypto, we wouldn&#8217;t be here. It costs a lot of money to clean up the mess left behind from coal mining,” said a Stronghold spokesperson to Blockworks.&nbsp;



The funds will be used to continue the clean up operations in Pennsylvania, to buy additional crypto mining hardware and also help fund additional facilities to clean up the waste coal as required, the company said.&nbsp;



“A negative impact on the environment has long been a criticism of bitcoin mining, with good reason,” Beard said. “Our ownership of the Scrubgrass Plant, combined with the environmental benefits which accrue to the region, allow us to mine bitcoin at what we believe to be some of the lowest costs in the industry while making a transformational contribution to the environment.”



The Pennsylvania region, and other regions that have been impacted by coal waste, provide the facility with what was once unusable waste material and gives it the ability to convert it into energy while reclaiming the land, based on Stronghold’s generating and environmental control technology and plants like Scrubgrass, it said.&nbsp;



“Simply put, we employ 21st-century crypto mining techniques to remediate the impacts of 19th and 20th-century coal mining in some of the most environmentally neglected regions of the United States,” said Bill Spence, co-founder of Stronghold.&nbsp;&nbsp;



To date, over 1,000 acres have been reclaimed and for each bitcoin mined by the plant, an estimated 200 tons of waste coal is eliminated, according to the company.&nbsp;



“Crypto mining allows us to continue that work by creating an economic incentive to do so. I believe we will see this model in numerous places around the globe, where the economic incentive of crypto will help build necessary infrastructure for power as an example,” a spokesperson said. “The recent developments in El Salvador would suggest that too. This proves there is a great way to mine bitcoin that actually supports communities, rather than taking away from them.”



The company expects to have over 28,000 cryptocurrency miners operating by the end of the year and is currently in negotiations to acquire additional environmentally beneficial facilities with over 200 megawatts of power capacity.&nbsp;