The bitcoin (BTC) mining business was shaken up within the final months of 2024 by the sudden entrance of a brand new participant: Cango (CANG), a Chinese agency that makes a speciality of offering loans to car consumers.
Based mostly in Shanghai and valued at $363 million on the inventory market, Cango is within the strategy of buying 50 exahashes per second (EH/s) price of mining energy, that means that the auto lending platform will turn out to be one of many largest bitcoin miners on this planet as soon as its whole fleet goes on-line.
“I guess it’s surprising for people in the [bitcoin mining] industry because nobody has ever heard of Cango before,” Juliet Ye, the corporate’s senior director of communications, advised CoinDesk in an interview. “But the history of Cango is a history of adaptation. We’ve diversified into different areas at least two or three 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 12 months. Even higher, Ye stated, this new bitcoin mining technique has catapulted Cango into the highlight.
“It’s been really hard for us to gain traction around the company, as a small- to mid-cap listed Chinese firm in the U.S.,” Ye stated. “All of a sudden, a lot of people are very much interested in Cango. The buzz around the company — we’ve never seen this before in the past.”
50 EH/s
Cango is extra used to serving to Chinese banks challenge loans for folks seeking 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 automobile exports from China to different elements of the world and has invested in Li Auto, a Chinese electrical car producer. Following that funding, Cango explored enterprise alternatives within the renewable power sector, together with high-compute energy tasks associated to AI, earlier than venturing into on bitcoin mining.
“Bitcoin mining is a very good way to rebalance energy grids,” Ye stated, referring to the truth that bitcoin miners can simply change their rigs on and off once more. Some jurisdictions, like Texas, reap the benefits of that means by encouraging miners to function in durations of low power 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 probably be offering roughly 6% of the whole computing energy behind Bitcoin as soon as the agency’s 50 EH/s absolutely come on-line. For reference, MARA Holdings (MARA), the biggest publicly traded miner on this planet, 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 imperative for scaled operations was a pivotal consideration in our decision to enter this domain,” Cango’s administration workforce advised CoinDesk in an electronic mail.
“The current landscape is marked by industry consolidation, with larger-scale operations becoming increasingly dominant due to escalating mining difficulty and the necessity 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 services and infrastructure, and to ensure the websites run easily.
“Even though we enter the industry with a significant amount of computing power, we are still new here, and we need time to adapt to the norms, and get a better understanding of the tax situation and the rest of the market,” Ye stated. “So at the beginning, we chose to work together with Bitmain and to use its operations teams.”
That state of affairs is prone to change over time, Ye stated, as Cango positive factors expertise within the sector and seeks to make its bitcoin mining operations extra economically environment friendly. Nurturing an in-house mining workforce would doubtless 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 can rely on how the 12 months unfolds, Ye stated. “We don’t rule out the possibility of making some tactical reductions [to the bitcoin holdings] based on market conditions,” she stated. Cango mined 363.9 BTC in November alone, a sum price roughly $35 million on the time of writing.
