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 language agency that focuses on offering loans to car consumers.
Based mostly 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 change into one of many largest bitcoin miners on this planet as soon as its complete fleet goes on-line.
“I suppose it’s shocking for individuals within the [bitcoin mining] business as a result of no one has ever heard of Cango earlier than,” Juliet Ye, the corporate’s senior director of communications, informed 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 thrice [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 actually arduous for us to realize traction across the firm, as a small- to mid-cap listed Chinese language agency within the U.S.,” Ye stated. “Rapidly, lots of people are very a lot taken with 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 individuals 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 automobile exports from China to different elements 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 initiatives associated to AI, earlier than venturing into on bitcoin mining.
“Bitcoin mining is an excellent approach to rebalance vitality grids,” Ye stated, referring to the truth that bitcoin miners can simply change their rigs on and off once more. Some jurisdictions, like Texas, benefit from that capability by encouraging miners to function in durations 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 full 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 of 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 workforce informed CoinDesk in an e mail.
“The present panorama is marked by business consolidation, with larger-scale operations changing into more and more dominant because of escalating mining problem 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 all over the world — together with within the U.S., Canada, Paraguay and Ethiopia — Cango remains to be relying closely on Bitmain for services and infrastructure, and to verify the websites run easily.
“Although we enter the business with a big quantity of computing energy, we’re nonetheless new right here, and we’d like time to adapt to the norms, and get a greater understanding of the tax state of affairs and the remainder of the market,” Ye stated. “So in the beginning, we selected to work along with Bitmain and to make use of its operations groups.”
That state of affairs is more likely to change over time, Ye stated, as Cango positive aspects expertise within the sector and seeks to make its bitcoin mining operations extra economically environment friendly. Nurturing an in-house mining workforce would possible 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 12 months unfolds, Ye stated. “We don’t rule out the potential for making some tactical reductions [to the bitcoin holdings] primarily based on market situations,” she stated. Cango mined 363.9 BTC in November alone, a sum price roughly $35 million on the time of writing.
