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Greenidge (NASDAQ:GREE) is a Bitcoin (CCC:BTC-USD) mining company. It came public recently via a reverse merger with internet software company Support.com. After the reverse merger, SPRT stock became GREE stock and there was a reverse stock split to raise the share price of the new trading entity.

All the machinations around the reverse merger and share split created a great deal of trader interest. Some folks on Reddit were referring to the situation as a potential "GameStop 2.0" (NYSE:GME).

Unfortunately for them, that did not happen. The merger and stock split failed to generate a durable short squeeze; instead, GREE stock lost the majority of its value within days of closing the deal.

The company isn't necessarily a goner just because its stock price performance has been dismal so far. In fact, Greenidge has a few positive traits going for it.

What Sets Greenidge Apart

First, Greenidge is a Bitcoin mining and power generation company. The second part is what makes it unique. Greenidge owns a 106 megawatt power generation facility in upstate New York. It is planning another unit in the 80 megawatt range for South Carolina as well.

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By owning its own power plants, Greenidge is able to control its cost of electricity and have clearer insight into its true cost of Bitcoin mining as opposed to rivals which rely on the general public power grid.

Greenidge is not currently using the full capacity of its New York facility. However, it recently increased its order to 22,500 S19j Pro Bitcoin miners, representing 4.1 EH/S of mining capacity. The company anticipates receiving delivery of those mining units in mid-2022 and getting them online shortly thereafter.

Going forward, the company aims to get to 500 megawatts of mining capacity by the end of 2025. It will likely need more capital to reach that goal. However, it did have $52 million in combined cash and cryptocurrency holdings as of the end of September, giving it some significant financial resources to work with.

Came Public Through a Hairy Deal

So why hasn't Greenidge faired better given these positive attributes? A big part of the underperformance is because the company came public in such an ugly way.

Greenidge didn't have an initial public offering (IPO) or special purpose acquisition company (SPAC). Instead, it chose the incredibly convoluted method described above with its reverse merger. This gave folks the sense that something was off about the company.

Admittedly, the SPAC window has closed a bit, as that sector has cooled off, so it makes sense skipping that route. Still, the company could have considered an IPO instead of this weird reverse merger operation if it wanted to generate a little more shareholder trust.

Crypto Is Hot, But Bitcoin Is Not

Another issue for Greenidge is that it mines Bitcoin. However, Bitcoin is not the part of the cryptocurrency universe that is attracting funds right now. Rather, traders are flocking into more alternative and speculative parts of the ecosystem.

Things such as the various dog coins, non-fungible tokens (NFTs), and projects hosted on Solana (CCC:SOL-USD) are where the action is at. Bitcoin, by contrast, doesn't have the same sort of capabilities in these newer areas of cryptocurrency. It's more of a brand and store of value at this point. However its high transaction costs and limited functionality leave it behind as far as innovation goes.

As such, as long as the focus is on cryptocurrency uses such as decentralized finance "DeFi" and NFTs, Bitcoin is bound to underperform. At some point, the speculative excesses are likely to fade, and Bitcoin will get a safe haven bid. Particularly as more of the new projects such as the Squid Game token end up as rug pulls, that should cause traders to head back to the comfort of Bitcoin.

For now, however, Greenidge is in the wrong place at the wrong time as there simply isn't much demand for mining firms. That's especially true given the recent launch of Bitcoin-related exchange-traded funds (ETFs).

GREE Stock Verdict

In the past, GREE stock likely would have ramped up simply from being one of the few ways to get crypto exposure on the stock market. That appeal is no longer there between the Bitcoin ETFs and other publicly traded crypto firms such as Coinbase (NASDAQ:COIN). Bitcoin's recent weakness is also a hinderance. And Greenidge's disastrous public rollout via its merger with Support.com left everyone with a bad first impression.

Still, we shouldn't write off the company entirely despite its underwhelming debut. There's potentially the core of an interesting business model here. The firm's investments in its own power generation could give it a pivotal advantage versus other Bitcoin mining firms. Given the current headwinds, however, investors will need to see some solid earnings from Greenidge to really buy into the stock.

On the date of publication, Ian Bezek 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.

Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.

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