A coal mining company revealed that it had been secretly mining Bitcoin for over three years.
Alliance Resource Partners, which is listed on the Nasdaq Stock Exchange under the ticker ARLP, revealed its commitment to the cryptocurrency during its first quarter earnings call.
“We really saw this as an opportunity given the fact that we have surplus power in our mining operations,” Cary Marshall, Alliance's senior vice president and chief financial officer, said in a transcript of the call released Monday. .
The search for ways to monetize these surplus resources led the company to purchase Bitcoin mining equipment in 2020 and 2021, during one of the biggest price increases in Bitcoin history. .
Today, the Boulder, Colorado-based company has 425 BTC on its balance sheet, worth $25 million at the time of writing, according to Marshall. ARLP's market capitalization is $2.8 billion, up 6% in the past five business days.
This disclosure means the alliance has been involved in Bitcoin for roughly the same amount of time as MicroStrategy, the world's largest Bitcoin holder, which purchased its first BTC in August 2020.
“We're not actually buying Bitcoin or anything like that,” Marshall clarified. “We are mining Bitcoin associated with these miners.”
Marshall's claims are supported by the company's first-quarter 8K report filed with the SEC, which states that the company has $30.3 million worth of “digital assets” on its balance sheet. It is said that there is.
The Alliance’s adoption of Bitcoin is an example of how BTC mining, even through non-renewable resources, can benefit the entire energy industry. Digital currency mining is location-independent and dynamic enough to be quickly curtailed if market conditions become unfavorable, making it a flexible demand response method.
Nishant Sharma, founder of Bitcoin mining research firm BloxBridge, said: “Alliance Resources' foray into Bitcoin mining is based on the process' ability to harness underutilized electricity and its economic benefits. Then it was a logical step,” he told Decrypt.
“Over time, we expect to see more Bitcoin mining pilot projects launched by other prominent energy companies,” Sharma added.
The Alliance claims that miners are taking advantage of “already paid but underutilized power loads” and there is no reason the company is burning additional coal just to mine more BTC. suggests that it is not. But some believe the Alliance revelations could still be bad news for Bitcoin, which has been criticized by nonprofit groups and regulators for polluting the environment.
CH4 Capital co-founder Daniel Batten is hesitant to jump to conclusions about the company until further investigation is conducted, but says the Alliance's involvement “doesn't help the cause of Bitcoin environmentalists.” he admitted.
“Given the low level of analysis of Bitcoin's environmental impact by GPUS and many traditional media to date, I think that nuance will be lost,” Batten told Decrypt. “I'm still not sure it burned down anyway.”
Edited by Ryan Ozawa.
