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 focuses on offering loans to car patrons.
Based mostly in Shanghai and valued at $363 million on the inventory market, Cango is within the means 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 the planet as soon as its whole fleet goes on-line.
“I assume it’s stunning for folks within the [bitcoin mining] trade as a result of no person 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 totally different areas at the very least 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 yr. Even higher, Ye stated, this new bitcoin mining technique has catapulted Cango into the highlight.
“It’s been actually arduous for us to achieve traction across the firm, as a small- to mid-cap listed Chinese language agency within the U.S.,” Ye stated. “Impulsively, lots of people are very a lot fascinated by Cango. The excitement across the firm — we’ve by no means seen this earlier than prior to now.”
50 EH/s
Cango is extra used to serving to Chinese language banks problem 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 automobile exports from China to different elements of the world and has invested in Li Auto, a Chinese language electrical automobile 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 an excellent solution to rebalance power grids,” Ye stated, referring to the truth that bitcoin miners can simply change their rigs on and off once more. Some jurisdictions, like Texas, make the most of that skill by encouraging miners to function in intervals 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 overall 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 the planet, owned somewhat 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 determination to enter this area,” Cango’s administration staff advised CoinDesk in an e-mail.
“The present panorama is marked by trade consolidation, with larger-scale operations turning into more and more dominant as a result 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 around the globe — 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.
“Regardless that we enter the trade with a major 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 state of affairs and the remainder of the market,” Ye stated. “So firstly, 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 good points expertise within the sector and seeks to make its bitcoin mining operations extra economically environment friendly. Nurturing an in-house mining staff would probably 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 depend upon how the yr unfolds, Ye stated. “We don’t rule out the potential of 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.
