While 2024 started with a boom in Bitcoin prices, the year hasn’t been kind to the miners who power the cryptocurrency, with last month’s “halving” cutting the rewards doled out to those operating computers that process the blockchain’s transactions.
One publicly traded mining firm, New York–based Stronghold, is set to announce on an earnings call today that it’s exploring a potential sale of all or part of the company in order to “maximize shareholder value,” according to a press release shared with Fortune. The company currently has a market cap of nearly $40 million.
While many mining firms tap into the existing grid to power the computers competing to process blocks of transactions and earn Bitcoin, Stronghold pioneered a unique model, operating two facilities that burn a waste material known as coal refuse, which the state of Pennsylvania pays companies to “reclaim.” By generating its own electricity through the process, Stronghold effectively serves as its own power plant, describing itself as the “only public, vertically integrated miner,” with a purported goal of “environmental reclamation and remediation.”
Despite the novel approach and the rise of Bitcoin prices following the January approval of Bitcoin ETFs, the outlook for miners such as Stronghold has darkened after April’s halving. While some analysts predicted that the publicly traded companies would have an advantage given the increase in operating costs, with inefficient operations going offline, the stocks of mining firms didn’t track Bitcoin’s meteoric ascent.
Stronghold shares worth about $11.25 in late 2024 were trading for roughly $3 on Wednesday. In late December, SEC filings showed that CEO Greg Beard, who owns 10% of the firm, sold nearly 40,000 shares, though he also bought around 1,000,000 during the prior year.
Stronghold’s press release didn’t disclose whether its decision to sell is related to halving-related pricing, although Beard did tell Kitco News in March that the event would “show we differ pretty quickly—why owning your own power is important.”
“Our value proposition is if power is expensive, we can quickly turn the Bitcoin mining data centers off because it’s not an essential service,” he said.
Instead, the press release attributed the decision to a “valuation dislocation” when comparing Stronghold’s market value with the valuations of other public Bitcoin mining companies, merchant power companies, and data centers. In a statement, Beard said that its existing capacity could be expanded for either Bitcoin mining or advanced computing for AI, as other firms are exploring. A company spokesperson declined to comment further.