Cango, a Chinese automotive transaction service platform, made a significant move into the bitcoin mining sector in late 2024 by acquiring 50 EH/s of mining power, positioning itself as a major contender in the industry. Here are the key points:
- In November, Cango invested $400 million to secure 50 EH/s of mining capacity, quickly establishing itself as one of the largest bitcoin miners globally.
- The company is heavily dependent on Bitmain for operational support.
- Cango, based in Shanghai and valued at $363 million, is transitioning from its core business of facilitating auto loans to bitcoin mining, a shift that surprised many in the industry.
Juliet Ye, Cango’s senior director of communications, noted the company’s history of adaptation and diversification since its founding in 2010. The initial investment included $256 million in cash for 32 EH/s from Bitmain, with the remaining 18 EH/s being financed through $144 million in shares from Golden TechGen and other sellers. This deal will result in Golden TechGen and its partners owning about 37.8% of Cango.
Cango’s stock surged over 362% in 2024, closing the year at $4.56, as the new mining strategy attracted significant attention. Ye emphasized the challenges of gaining visibility as a smaller firm in the U.S. market, but the bitcoin mining venture has generated considerable interest.
While Cango traditionally assisted banks in issuing car loans, it has diversified into various sectors, including car exports and investments in electric vehicle companies. The company views bitcoin mining as a strategic way to balance energy grids, leveraging the ability to adjust operations based on energy demand.
With Bitcoin’s total hashrate at approximately 823 EH/s, Cango’s contribution will account for around 6% of the network’s computing power once fully operational. In comparison, leading miners like MARA Holdings, CleanSpark, and Riot Platforms have lower hashrates.
Cango’s management highlighted the importance of scaling operations in the competitive mining landscape, where larger entities are increasingly dominant due to rising mining difficulty and the need for advanced hardware. Currently, Cango does not operate its own mining facilities and relies on Bitmain for infrastructure and operational management.
As Cango gains experience, it plans to develop its in-house mining capabilities to enhance efficiency. Regarding its bitcoin holdings, the company remains open to adjusting its strategy based on market conditions. In November, it mined 363.9 BTC, which was valued at around $35 million at that time.