A Pennsylvanian company that claims it can mine bitcoin at half the price of other places by tapping into stockpiles of waste coal rocketed in first dealings after a listing in New York.
Stronghold is the name of the business and Greg Beard, the CEO, said that by owning the energy and mining hardware it can generate “better margins than everybody else.”
Bitcoin mining is essentially a function of sourcing electricity [to run the huge amounts of computing power needed] as cheaply as possible.
“I think that all the [bitcoin] miners will gravitate toward having their own power when they understand that’s the direction that the leaders are going,” Beard added.
Pennsylvania has been a key component of the US coal mining business since the late-1700s, but since 1975 it has been legal to put the by-product from coal mining in piles at the side of the mine, and there are now over 840 piles.
Stronghold brings the waste coal from these sites to its two facilities, where fluidised bed boilers remove the toxins, which help produce power to generate electricity for its bitcoin miners.
“We are reclaiming and remediating a legacy problem from decades of coal mining in Pennsylvania,” said Beard.
“Bitcoin mining is the most economic use of that power today,” the CEO added.
It’s a competitive market, with rivals such as Riot Blockchain and Marathon Digital also tapping this seam, but investors liked the story nevertheless.
Shares of Stronghold Digital Mining, ticker symbol “SDIG”, jumped 52% from US$19 to US$28.90 on their first day of trading on 20 October, helped by bitcoin hitting a new all-time high of nearly US$67,000.
The rally came a day after the launch of the first-ever US bitcoin exchange-traded fund (ETF), under the ticker symbol “BITO” created by ProShares.
It is expected to be the first of many such funds, making bitcoin accessible in various ways to investors with a brokerage account.
Greg Beard, Stronghold’s CEO, said the company chose to go public through the less popular IPO approach rather than going the special purpose acquisition company (SPAC) route.
“I think we’re getting a lot more interest from investors because we have been vetted by the SEC the regular way,” Beard said.