Stronghold Digital: Business Model Yet To Be Truly Tested

Stronghold Digital looks like it has enough capital available to endure low Bitcoin prices over the next year or so.As with all Bitcoin miners, Stronghold will struggle until the price of Bitcoin sustainably rebounds. I think that is likely to happen in Q4 of 2022.Its next earnings report will determine whether or not energy revenue will help the company form higher bottom when measured against its peers.Energy sales won't have much impact on the top line if the firm stops mining Bitcoin in response to lower prices.Stronghold Digital Mining, Inc. (SDIG) is different from the majority of Bitcoin (BTC-USD) miners in that they have the option of cutting back on, or halting Bitcoin production, in order to sell energy.This theoretically can mitigate revenue loss when the price of Bitcoin collapses and provide more growth when the company starts mining Bitcoin again.In this article we'll look at whether or not this is a sound strategy that has legs to it, or if it'll collapse under the response of the market to the price movement of Bitcoin.But before we get into that, let's look at the latest earnings report numbers.Latest earnings reportRevenue in Q1 came in at $28.7 million, up from $3.8 million year-over-year, and beating analysts' estimates of $26, 2 million. Net loss in the quarter soared to $32.3 million, against the $0.2 million last year in the same reporting period.Operating expenses in the quarter jumped to $58.3 million,...