Key Points
- Alliance Resource, a NASDAQ-listed coal miner, has mined approximately 425 Bitcoins using excess power from its facilities.
- A significant transfer of Bitcoin from miners to spot exchanges has been detected, suggesting a potential market imbalance.
Alliance Resource Ventures into Bitcoin Mining
Alliance Resource, a traditional market player, has ventured into the Bitcoin mining industry. Despite the reduction in block rewards following the recent Bitcoin halving event, the company has mined around 425 Bitcoins worth $30 million using excess power generated at its facilities.
Cary Marshall, the firm’s chief financial officer, stated during the earnings call that the company began mining Bitcoin in the second half of 2020. The initiative aimed to monetize the underutilized electricity load at their River View mine.
Company’s Bitcoin Holdings and Future Plans
By the end of Q1 2024, Alliance Resource Partners (NASDAQ: ARLP) holds over 425 Bitcoins on its balance sheet. The value of these holdings stands at $30 million considering the current Bitcoin price. However, after factoring in net costs such as plant, property, and equipment, the value amounts to $7.3 million.
Following the earnings report, ARLP’s shares surged by 5%, surpassing the revenue estimates set for the company. Marshall clarified that ARLP is not purchasing Bitcoin or similar assets; instead, it is solely focused on mining Bitcoin using its existing equipment.
Marshall also mentioned that they are renting out some extra capacity to other Bitcoin miners within the data center that they’ve built for Bitcoin mining. This is to take advantage of the low energy costs they have.
Bitcoin Miners and Market Imbalance
Cryptoquant, an on-chain analytics platform, detected a notable transfer of Bitcoin from miners to spot exchanges. This movement suggests an increase in Bitcoin being sold by miners, potentially indicating a market imbalance.
It was expected that Bitcoin miners would sell their Bitcoin to cover operational costs following the Bitcoin halving event. This move seems logical as miners are currently earning about half the Bitcoin revenue compared to previous weeks, despite similar price levels.
Miners play a crucial role in validating and securing the network, bearing expenses such as electricity, hardware, rent, and payroll. In exchange for their efforts, they receive rewards in the form of Bitcoin. However, if negative profitability persists among miners for an extended period, it could potentially impact Bitcoin’s price.
