Alliance Resource Partners, a renowned coal mining company trading under the ticker ARLP on the Nasdaq, recently revealed that it has entered the realm of Bitcoin (BTC) mining.
With a net worth of $2.8 billion, Alliance’s foray into Bitcoin mining positions it as one of the few traditional companies embracing the digital asset. This marks a significant step for the company in diversifying its operations.
Alliance Resource Partners: $30 Million in BTC on Balance Sheet
Cary Marshall, Senior Vice President and CFO of Alliance Resource Partners, disclosed during the miner’s Q1 earnings call that the company began its Bitcoin mining venture in the latter half of 2020.
This initiative was born out of a desire to capitalize on the surplus electricity load at its River View mine, thus leveraging existing infrastructure for additional revenue streams.
Marshall highlighted the company’s successful bitcoin mining efforts, revealing that Alliance currently holds 425 BTC, equivalent to around $30 million based on the $70,500 BTC price at the end of Q1 2024.
Marshall emphasized that the BTC currently on the balance sheet are result of their mining efforts, and that the company has not been “out there buying bitcoin”. This valuation reflects a net profit of $7.3 million from its Bitcoin mining activities in Q1.
This financial success places Alliance as the 23rd company in terms of bitcoin holdings on its balance sheet, underlining its significant investment in the digital asset.
A Pragmatic Strategy
Joe Craft, President and CEO of Alliance, emphasized that the company’s move into Bitcoin mining does not signify a complete shift in strategy but rather a pragmatic approach to utilizing its resources.
Craft clarified that Alliance sells a portion of its bitcoin holdings to cover expenses, thus limiting its exposure to market volatility.
Additionally, the company has spare capacity in its data center, which it rents out to other Bitcoin miners, taking advantage of its low energy costs. Craft explained:
“We do have some extra capacity that we’re renting out to other Bitcoin miners within the data center that we’ve effectively built for this Bitcoin mining to take advantage of the low energy costs we have.”
The CEO’s statements reflect Alliance’s calculated approach to Bitcoin mining, balancing risk and opportunity. This strategy aligns with Alliance’s core business model, ensuring stability and sustainability in its operations.
Increasing Bitcoin Adoption
Alliance’s entry into Bitcoin mining signals a broader trend of traditional companies exploring the digital asset as a viable investment and revenue-generating opportunity.
While some view Bitcoin mining as a speculative venture, Alliance’s success demonstrates that with careful planning and execution, it can be a profitable endeavor for established businesses.
The company’s position on the Nasdaq provides further validation of Bitcoin’s growing acceptance among institutional investors and traditional industries.
Moreover, the recent approval of spot Bitcoin Exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC) further provided legitimacy to the digital asset.
As Bitcoin continues to gain acceptance, Alliance’s move underscores the evolving nature of the financial sector and the opportunities presented by bitcoin in this realm.
