Watch out — there’s a brand new cryptocurrency mining play on Wall Street. It’s Stronghold Digital Mining (NASDAQ:SDIG), which just recently introduced SDIG stock to the public for trading. But is this stock worth buying?
Maybe you have a cryptocurrency portfolio and want to add a miner or two to the mix. That’s not a bad idea. What’s more, Stronghold fits that bill — the company’s business is all about mining for Bitcoin (CCC:BTC-USD). However, while other crypto miners are concerned with how much hash power they have, that’s not this company’s main angle.
Rather, Stronghold is also all about sustainability and minimizing environmental impact — a hot topic in the crypto world today. So, let’s delve into the basic facts of SDIG stock and try to determine whether this is a crypto-focused asset worth owning right now.
A Closer Look at SDIG Stock
Let’s go back to the beginning. On Oct. 19, Stronghold Digital Mining announced its pricing of an upsized initial public offering (IPO) of 6,687,305 shares in Class A common stock at $19 per share. That was slightly above the expected price range between $16 to $18, as reported by InvestorPlace writer Brenden Rearick.
This was an auspicious start for Stronghold, to say the least. On Oct. 20, the day after SDIG stock debuted for public trading, Rearick reported that the share price increased by nearly 53%.
As it turns out, the stock went on to top out at $31.90 on the day. Throughout the remainder of October, however, it leveled off and stayed near the $27 mark.
Obviously, there’s not a lot of price history here. Therefore, loading up on SDIG stock isn’t recommended. Wall Street is still in the process of determining what the stock is actually worth.
On the other hand, though, a small position in Stronghold Digital Mining might be worth holding. So, let’s delve into the company’s operations and find out what sets this particular miner apart from the others.
A Different Kind of Coal Mining
Based in Pennsylvania, Stronghold has one plant called Scrubgrass and another called Panther Creek. The latter has an executed binding purchase agreement that’s not yet closed.
The Scrubgrass plant has 85 megawatts (MW) of generation capacity, while the Panther Creek plant provides 80 megawatts.
That’s not a bad start for this little Bitcoin miner. We have to admit, though — there are miners out there with much more hash power.
For Stronghold Digital Mining, however, being better doesn’t mean bigger. Rather, it means being more sustainable — and doing things differently. As Rearick concisely sums up, the company’s plant locations in Pennsylvania have a very specific significance:
“The company sets itself apart by mining crypto using bituminous waste coal. Western Pennsylvania is a historically significant area for coal power production, and, as such, coal waste litters the countryside. Stronghold is seeing-through its own clean up efforts by using these waste deposits […]”
Reclaiming the Environment with Crypto
In other words, Stronghold’s facilities convert coal refuse into power, which in turn is used to mine Bitcoin. This is a huge plus for SDIG stock.
As the company points out, Pennsylvania classifies coal refuse as a Tier II alternative energy resource, equivalent to large-scale hydro power. Moreover, the process of converting coal refuse into power “allows [for] the reclamation of large geographic areas that have been ravaged by […] the environmentally harmful byproduct of Pennsylvania’s legacy coal-mining operations.”
That’s quite a concept. Of course, the typical assumption about Bitcoin mining plants is that they are energy wasters. But Stronghold Digital Mining is turning that assumption on its head by providing crypto mining operations that can actually help restore the environment.
As Stronghold CEO Greg Beard puts it, the company is “reclaiming and remediating a legacy problem from decades of coal mining in Pennsylvania […] Bitcoin mining is the most economic use of that power today.”
The Bottom Line on SDIG Stock
Both coal production and Bitcoin mining have bad reputations among environmentalists. However, Stronghold Digital Mining is working diligently — and with a truly unique approach — to fix this problem.
It’s a fascinating and audacious company. And as for SDIG stock, it’s still reasonably priced. SDIG also has moon-shot potential for those crypto-market traders with a taste for businesses off the beaten path.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
