The bitcoin (BTC) mining trade was shaken up within the final months of 2024 by the sudden entrance of a brand new participant: Cango (CANG), a Chinese language agency that makes a speciality of offering loans to car patrons.
Primarily based in Shanghai and valued at $363 million on the inventory market, Cango is within the technique of buying 50 exahashes per second (EH/s) price of mining energy, which means that the auto lending platform will turn out to be one of many largest bitcoin miners on the earth as soon as its total fleet goes on-line.
“I assume it’s stunning for folks within the [bitcoin mining] trade as a result of no one has ever heard of Cango earlier than,” Juliet Ye, the corporate’s senior director of communications, advised CoinDesk in an interview. “However the historical past of Cango is a historical past of adaptation. We’ve diversified into completely different areas a minimum of two or 3 times [since the firm was established in 2010].”
Getting such a big bitcoin mining fleet isn’t low-cost. Cango paid $256 million in money for the primary 32 EH/s price of computing energy, which it bought from bitcoin mining machine producer Bitmain. It will likely be issuing $144 million price of shares for the remaining 18 EH/s, which it’s buying from Golden TechGen — a agency owned by former Bitmain Chief Monetary Officer Max Hua — in addition to different undisclosed mining machine sellers. As soon as the transaction is settled, Golden TechGen and these different sellers will find yourself proudly owning roughly 37.8% of Cango.
The diversification into bitcoin mining is already bearing fruit. Cango’s inventory completed 2024 at $4.56, up greater than 362% from the beginning of that yr. Even higher, Ye mentioned, this new bitcoin mining technique has catapulted Cango into the highlight.
“It’s been actually exhausting for us to realize traction across the firm, as a small- to mid-cap listed Chinese language agency within the U.S.,” Ye mentioned. “Abruptly, lots of people are very a lot keen on Cango. The thrill across the firm — we’ve by no means seen this earlier than up to now.”
50 EH/s
Cango is extra used to serving to Chinese language banks challenge loans for folks trying to purchase automobiles. However the agency, which went public in 2018, was already diversifying its operations years earlier than buying its bitcoin fleet.
Cango began facilitating automotive exports from China to different components of the world and has invested in Li Auto, a Chinese language electrical car producer. Following that funding, Cango explored enterprise alternatives within the renewable vitality sector, together with high-compute energy tasks associated to AI, earlier than venturing into on bitcoin mining.
“Bitcoin mining is an excellent method to rebalance vitality grids,” Ye mentioned, referring to the truth that bitcoin miners can simply swap their rigs on and off once more. Some jurisdictions, like Texas, make the most of that potential by encouraging miners to function in intervals of low vitality consumption, and paying them to close down their machines when native demand surges, like throughout heatwaves or blizzards.
With Bitcoin’s hashrate now hovering at 823 EH/s, Cango will likely be offering roughly 6% of the overall computing energy behind Bitcoin as soon as the agency’s 50 EH/s absolutely come on-line. For reference, MARA Holdings (MARA), the most important publicly traded miner on the earth, owned a bit over 47 EH/s price of computing energy as of November, per TheMinerMag information. CleanSpark (CLSK) and Riot Platforms (RIOT), the 2 subsequent largest, stood at 32 EH/s and 26 EH/s respectively.
“The Bitcoin mining sector’s crucial for scaled operations was a pivotal consideration in our choice to enter this area,” Cango’s administration crew advised CoinDesk in an e mail.
“The present panorama is marked by trade consolidation, with larger-scale operations changing into more and more dominant as a consequence of escalating mining issue and the need for state-of-the-art {hardware}.”
One main distinction between Cango and different mining heavyweights is that Cango isn’t working its personal mining fleet proper now. With machines unfold out world wide — together with within the U.S., Canada, Paraguay and Ethiopia — Cango remains to be relying closely on Bitmain for amenities and infrastructure, and to ensure the websites run easily.
“Though we enter the trade with a big quantity of computing energy, we’re nonetheless new right here, and we want time to adapt to the norms, and get a greater understanding of the tax scenario and the remainder of the market,” Ye mentioned. “So originally, we selected to work along with Bitmain and to make use of its operations groups.”
That scenario is prone to change over time, Ye mentioned, as Cango good points expertise within the sector and seeks to make its bitcoin mining operations extra economically environment friendly. Nurturing an in-house mining crew would seemingly be cheaper than counting on Bitmain’s experience in the long term.
As for what Cango plans to do with its rising bitcoin stash, that may rely on how the yr unfolds, Ye mentioned. “We don’t rule out the opportunity of making some tactical reductions [to the bitcoin holdings] primarily based on market circumstances,” she mentioned. Cango mined 363.9 BTC in November alone, a sum price roughly $35 million on the time of writing.
