Public-Listed Coal Miner Alliance Resource Partners Dabbles into Bitcoin Mining

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As a researcher with a background in finance and experience in following the cryptocurrency market, I find the recent developments in the Bitcoin mining industry particularly intriguing. The decision by traditional market players like Alliance Resource Partners to enter the Bitcoin mining scene using their excess power capacity is a testament to the resilience of this decentralized digital currency.

I, as an industry analyst, have observed that the Bitcoin mining sector remains alluring to conventional market participants, even following the decrease in block rewards after the latest halving event. Notably, Alliance Resource, a NASDAQ-listed coal miner, has disclosed mining approximately 425 Bitcoins valued at around $30 million by utilizing the surplus power produced at their facilities.

During the earnings call, Cary Marshall, the firm’s chief financial officer, said:

In the latter part of 2020, we initiated Bitcoin mining as an experimental endeavor to generate income from the excess, previously paid-for yet underutilized electrical capacity at our River View mining facility.

According to Marshall’s report, Alliance Resource Partners (NASDAQ: ARLP) owns approximately 425 Bitcoins on their balance sheet by the close of Q1 in 2024. With the current Bitcoin price, this holding equates to around $30 million. However, if we take into account the net costs such as plant, property, and equipment, the value of the Bitcoins would be reduced to approximately $7.3 million.

After releasing their earnings report, ARLP experienced a 5% increase in value, exceeding the anticipated revenue figures for the business. It’s important to note that ARLP is not planning to acquire Bitcoins or comparable assets; instead, they are solely dedicated to mining Bitcoin utilizing their current equipment.

“He added that we have excess mining capability in our data center, specifically designed for Bitcoin mining due to its low energy expenses, which we’re leasing out to other Bitcoin miners.”

Bitcoin Miners Exert BTC Sell Pressure

An on-analysis platform called Cryptoquant has identified a significant shift of Bitcoin from miners to trading markets. This transaction pattern may signify an increase in Bitcoin being offloaded by miners, possibly hinting at a potential disequilibrium within the market.

It was expected that many Bitcoin miners would need to sell some of their bitcoins to meet their expenses after the Bitcoin halving occurred. Given the current situation, this action seems rational: miners now earn only about half the amount of bitcoins they used to receive as rewards for each block mined, even though the price remains unchanged.

The miners sent a large amount of #Bitcoin to spot exchanges

“Noticing large amounts of Bitcoin from miners going to major exchanges can give the market a feeling of instability.” – Paraphrased by an expert.

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— CryptoQuant.com (@cryptoquant_com) April 29, 2024

Miners are essential for verifying and maintaining the integrity of the Bitcoin network by shouldering costs like electricity, hardware, rent, and salaries. In return, they obtain new Bitcoins as remuneration for their work. Prolonged unprofitability among miners could theoretically influence Bitcoin’s value in the marketplace.

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2024-04-30 17:46