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Is Bitcoin Miner Stronghold (SDIG) Stock a Good Investment?

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Oct. 21 2021, Published 8:14 a.m. ET

Stronghold Digital Mining (SDIG) has joined the list of publicly traded Bitcoin mining companies. It made its public market debut on Oct. 20 to a rousing welcome—the stock rose nearly 70 percent on its first day of trading. How high can SDIG stock go? What's Stronghold Digital's stock forecast for 2025?

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Investors have an expanding selection of Bitcoin mining stocks to choose from. In addition to Stronghold Digital, there's Marathon Digital (MARA), Riot Blockchain (RIOT), Bit Digital (BTBT), and Bitfarms (BITF). Core Scientific is also gearing up for an IPO, which will further broaden options for Bitcoin stock investors. With the wide selection, investors are trying to identify the best Bitcoin miner stock to buy.

Stronghold Digital's (SDIG) IPO coincides with Bitcoin hitting price record

Stronghold priced its stock at $19 for the public offering, above the marketed range of $16–$18. It offered 6.7 million shares, more than the 5.8 million shares it initially planned to sell in what is now clearly an oversubscribed IPO.

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SDIG stock opened at $27. It rose as much as 68 percent to touch $31.90 high in the early hours of its debut. It closed the day up 52 percent at $28.90. Bitcoin hit a record high of about $67,000 on Stronghold’s IPO day. Interest in Bitcoin as an investment has soared since ProShares launched its Bitcoin BITO ETF.

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How high can SDIG stock go?

Stronghold IPO stock traded between a high of $31.90 and a low of $26 on its first day on the public market. Its $28.90 closing price was 10 percent below its debut peak. SDIG stock has a chance to reclaim that peak and surge even higher. Marathon Digital and Riot Blockchain, the top Bitcoin mining stocks by market cap, trade at $53 and $31, respectively.

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Stronghold Digital's (SDIG) 2025 stock forecast

Stronghold's revenue more than tripled year-over-year to $7.9 million in the first half of 2021 from $2.2 million. Bitcoin trends will greatly influence SDIG stock in the future.

There are many reasons to believe Bitcoin will continue to rise. One of them is institutional investors’ growing interest in the flagship crypto. Bitcoin’s recent spike to a record of about $67,000 came in response to the launch of ProShares’ Bitcoin ETF. More Bitcoin ETFs from providers such as Invesco, Valkyrie, and VanEck are expected to launch in the future. The launch of these funds could push the crypto to greater highs.

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Stronghold-specific fundamentals will also determine how much SDIG stock will be worth. The company has mined only a tiny amount of Bitcoin so far, but that's expected to change. It raised about $130 million in the IPO and it plans to use the money to purchase more miners and energy-generating assets to increase its capacity and electricity output. Stronghold aims to quadruple its mining capacity in about a year.

Is Stronghold (SDIG) stock a good long-term investment?

Stronghold uses waste coal to generate electricity for its Bitcoin mining operations. Therefore, its activities are also beneficial to the environment because they help reclaim land from Pennsylvania's legacy coal-mining industry.

Bitcoin is expected to continue rising amid its growing adoption as a means of payment, investment, and store of value. Therefore, Stronghold has a promising outlook. Furthermore, Stronghold CEO Gregory Beard has said that producing its own electricity puts the company in a great position to generate better profit margins than its competitors.

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