US-based Stronghold Digital Mining, or SDIG, recently reported having sold 26,200 crypto mining rigs to take care of $67.4 million in debt from the slump seen by the recent decline of digital currency. SDIG has maintained around 16,000 miners and is in the process of selling over 100MW excess power generation.
Stronghold Digital Mining reports having sold 26,000 crypto mining units to make up for the digital currency decline earlier this year
Significant crypto mining operations have got into considerable debt in 2022. However, their mining hardware is still worth a hefty amount. The company has retained around 16,000 Bitcoin miners, using a hash rate capacity topping 1.4 EH/s and drawing around 55 megawatts in power consumption.
However, SDIG maintains an optimistic future. Even with having to sell off machinery to pay off looming debts, the company feels that if the markets change, they will be able to afford more mining rigs at a more affordable price. The company also reported losing 2.5 EH/s of power from crypto mining in its recent equipment reductions. Tom's Hardware states that SDIG management will focus on "cryptocurrency pricing, power pricing, and mining rig pricing and efficiency" until the possible crypto decline shifts.
SDIG recently updated its financing contract with Whitehawk Finance LLC, allowing the company to add a supplementary adjustable pool of $20M that they can borrow, increase the term to thirty-six months, and decrease near-term expenses. SDIG kept $47 million from the paid debt from selling their crypto mining equipment to allow for future investments.
For good reasons, the bitcoin mining company is one of the larger crypto companies in the market. The company is vertically integrated in that not only do they own and operate their crypto mining rigs, but they also own and conduct roughly 165 megawatts in generated power. SDIG owns two plants in Pennsylvania, one in Scrubgrass and one in Panther Creek, that burn coal and refuse to assist in receiving energy credits. However, piles of coal refuse can have significant adverse environmental impacts, including the leaching of iron, manganese, and aluminum residues into waterways and acid mine drainage. The runoff can produce surface and groundwater contamination, so companies must meet guidelines set by the EPA.
Stronghold also feels "it is a good time to scale back Bitcoin mining due to the higher power prices/demand." The company's mining operations have diminished to around 56 megawatts, so Stronghold must sell off leftover excess power. The flexibility that the company has given itself to transfer energy to either outgoing supplies or mining processes helps to achieve a better profit.
The cryptocurrency price has improved since its dramatic drop in June this year. Ethereum increased twice as much as the cost two months ago, while Bitcoin has increased by around $5,000 to rise to $23.500 per BTC. In July, the price of mining Bitcoin cost approximately $13,000. For it to grow close to $10,000 over a month does give hope to those investing in digital currencies.