Skip to main content

Bitcoin Mining Company Sells 26,200 Rigs to Eliminate $67M Debts

SDIG cryptomining
(Image credit: SDIC)

Big cryptomining operations have got into big debt in 2022. However, their mining hardware is still worth a princely sum. A case in point is US-based Stronghold Digital Mining (SDIG), which released its latest set of financials earlier this week. One of the most eye opening observations in the financial statement was that SDIG recently cleared $67.4M in debt by selling off 26,200 of its mining rigs.

Selling off over 26,000 mining rigs hasn’t left the Stronghold mines, upon which its future prosperity largely depends, empty. The firm says it has retained approximately 16,000 Bitcoin miners with a hash rate capacity of over 1.4 EH/s and total power draw of 50-55 megawatts.

Though losing the majority of its mining rigs to clear a debt (and 2.5 EH/s of crypto mining power), SDIG reckons that if the market conditions change favorably it will be able to buy up more mining rigs at a keen price. In brief, there are four major factors SDIG management will be watching; cryptocurrency pricing, power pricing, and mining rig pricing and efficiency.

Some other good news for SDIG is that it has updated its financing agreement with Whitehawk Finance LLC, adding a flexible extra pool of $20M borrowing, doubling the term to 36 months, and reducing near-term payments. With the $67M debt paid off from the sale of mining rigs, Stronghold has $47M liquidity for opportunistic investment.

Stronghold’s Vertically Integrated Advantage

A cryptomining company selling off its rigs doesn’t sound like a very hot investment. SDIG has a strength compared to many other miners, though, as it is vertically integrated. As well as owning and operating mining rigs, it owns and operates approximately 165 MW of power generation capacity. Its Scrubgrass and Panther Creek plants in Pennsylvania burn coal refuse, which is a waste byproduct of legacy coal mining operations for power and renewable energy credits.

SDIG cryptomining

(Image credit: SDIC)

With its mining operations scaled back to <56MW that leaves a lot of excess power to be sold. It says this is a good time to scale back Bitcoin mining due to the higher power prices / demand. Stronghold’s flexibility to divert power to mining or outgoing supply for the best profits are a clear advantage in this business.

Cryptocurrency prices are well off the lows we saw in June 2022. ETH has climbed back to nearly double its June low, and BTC is about $5,000 up from its June lows, sitting today at around $23,500. Last month, in a news article about the cost of Bitcoin mining, we reported that a Bitcoin currently costs about $13,000 to mine, thanks to new energy efficient ASICs from the likes of Intel and Bitmain. Selling this coin for $23,500 obviously provides some scope for profits. Whether this is an attractive business to be in depends on your feeling about the prospects of crypto over the longer term.

Mark Tyson
Freelance News Writer

Mark Tyson is a Freelance News Writer at Tom's Hardware US. He enjoys covering the full breadth of PC tech; from business and semiconductor design to products approaching the edge of reason.

  • TheOtherOne
    There are about 40,000 gamers somewhere out there (and millions more!) who are cursing all this mining BS and wishing it would've never happened.
    Reply
  • BlueOnes
    TheOtherOne said:
    There are about 40,000 gamers somewhere out there (and millions more!) who are cursing all this mining BS and wishing it would've never happened.

    Miner here: For starters, our livelihoods are more important than your framerates. But that's besides the point. The shortage was not our fault, as much as gamers love to blame us. Its not our fault. Im sorry, it just isnt. Its NVidias fault. NVidia had a golden opportunity to end the shortage, and chose to blow it to keep prices high for profits.
    Reply
  • Neilbob
    BlueOnes said:
    Miner here: For starters, our livelihoods are more important than your framerates. But that's besides the point. The shortage was not our fault, as much as gamers love to blame us. Its not our fault. Im sorry, it just isnt. Its NVidias fault. NVidia had a golden opportunity to end the shortage, and chose to blow it to keep prices high for profits.

    I think a very large majority of people, not just gamers, take a rather dim view of your 'livelihood' that involves just letting technology make money for you while having a negative impact on the environment. There's absolutely no kind of benefit to society or to anyone other than you taking place.

    Nice go at trying to transfer any kind of blame from yourself though. NVidia (or AMD for that matter) are certainly no shining knights here, but the root of the issue was absolutely your fault. Perhaps production of GPUs could have increased, perhaps not, but any extra ones would almost certainly still have been snapped up by miners.

    Not the reply I wanted to make. I suspect that would have been a little bit redacted.
    Reply
  • BlueOnes
    Neilbob said:
    I think a very large majority of people, not just gamers, take a rather dim view of your 'livelihood' that involves just letting technology make money for you while having a negative impact on the environment. There's absolutely no kind of benefit to society or to anyone other than you taking place.

    Nice go at trying to transfer any kind of blame from yourself though. NVidia (or AMD for that matter) are certainly no shining knights here, but the root of the issue was absolutely your fault. Perhaps production of GPUs could have increased, perhaps not, but any extra ones would almost certainly still have been snapped up by miners.

    Not the reply I wanted to make. I suspect that would have been a little bit redacted.

    It is not our fault. I'm sorry. But it isn't. NVidia had a golden ticket, a 1-step quick solution to end the shortage. They chose to give it up for profit and greed. That is not us. That is them
    Reply
  • escksu
    TheOtherOne said:
    There are about 40,000 gamers somewhere out there (and millions more!) who are cursing all this mining BS and wishing it would've never happened.

    Gamers are equally guilty..... No better than miners... All wasting collosal amount of power.
    Reply
  • ezst036
    TheOtherOne said:
    There are about 40,000 gamers somewhere out there (and millions more!) who are cursing all this mining BS and wishing it would've never happened.

    The article seems a little light about the details of the hardware contained within "the rigs", however, it strikes me that there is a possibility that this might just be nothing but generational sell off.

    Geforce RTX 4xxx's are for Miners.
    Geforce RTX 3xxx's are for Gamers.

    In next year's sell off:

    Geforce RTX 5xxx's are for Miners.
    Geforce RTX 4xxx's are for Gamers.

    I guess it all depends on what happens with those mining ASICs that some companies (including Intel) are fabbing.
    Reply
  • InvalidError
    TheOtherOne said:
    There are about 40,000 gamers somewhere out there (and millions more!) who are cursing all this mining BS and wishing it would've never happened.
    The title says "Bitcoin mining" and BTC mining on GPUs hasn't been economically viable in 4-5 years due to ASIC miner domination.

    escksu said:
    Gamers are equally guilty..... No better than miners... All wasting collosal amount of power.
    Gamers typically use only one system with only one GPU and only a few hours per day at that. Miners run several high-powered GPUs (hundreds of thousands for large-scale crypto companies) 24/7. Their environmental impact is orders of magnitude worse. Every hour that gamers spend gaming is one hour they aren't doing something else likely to be even more energy-intensive while every hour that crypto-miners mine is likely used to fund other even more energy-intensive stuff that robs society of even more resources.

    If gamers weren't gaming, they'd likely be driving to places, getting driven to places or having stuff driven to them instead, which is 10-100X more energy-intensive depending on transportation method and how far people need to go for their substitute hobbies.
    Reply
  • ezst036
    InvalidError said:
    The title says "Bitcoin mining" and BTC mining on GPUs hasn't been economically viable in 4-5 years due to ASIC miner domination.

    4 to 5 years? Was this year's video card non-availability just vaporware? Since miners did not buy any of those cards, who was buying them and why for such crazy prices?

    Or was this meant to be a clarifying "not bitcoin mining, but Ethereum mining" about the flavor of mining?

    Just curious.
    Reply
  • InvalidError
    ezst036 said:
    4 to 5 years? Was this year's video card non-availability just vaporware? Since miners did not buy any of those cards, who was buying them and why for such crazy prices?

    Or was this meant to be a clarifying "not bitcoin mining, but Ethereum mining" about the flavor of mining?

    Just curious.
    The GPU unavailability was largely caused by Ethereum mining, not Bitcoin. Now that a bunch of ETH mining ASICs have become available though, GPU-mining ETH is going to become obsolete soon-ish enough regardless of whether ETH goes PoS.

    If next-gen GPUs get hogged by crypto-mining, it will be by the rise of one of ETH's PoW contenders.
    Reply
  • velocityg4
    Neilbob said:
    I think a very large majority of people, not just gamers, take a rather dim view of your 'livelihood' that involves just letting technology make money for you while having a negative impact on the environment. There's absolutely no kind of benefit to society or to anyone other than you taking place.

    Nice go at trying to transfer any kind of blame from yourself though. NVidia (or AMD for that matter) are certainly no shining knights here, but the root of the issue was absolutely your fault. Perhaps production of GPUs could have increased, perhaps not, but any extra ones would almost certainly still have been snapped up by miners.

    Not the reply I wanted to make. I suspect that would have been a little bit redacted.

    There's a benefit for drug cartels, data ransomers, kidnappers, corrupt regimes and such. As they can untraceably send and receive large amounts of money. Making it easier to launder. Think of the ruthless drug lords.😢
    Reply