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 consumers.
Primarily based in Shanghai and valued at $363 million on the inventory market, Cango is within the means of buying 50 exahashes per second (EH/s) value of mining energy, that means that the auto lending platform will develop into one of many largest bitcoin miners on the earth as soon as its complete fleet goes on-line.
“I suppose it’s stunning for individuals 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 no less than 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 value of computing energy, which it bought from bitcoin mining machine producer Bitmain. It will likely be issuing $144 million value 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 mentioned, 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 mentioned. “Swiftly, lots of people are very a lot concerned with 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 concern loans for individuals trying to purchase vehicles. 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 power sector, together with high-compute energy initiatives associated to AI, earlier than venturing into on bitcoin mining.
“Bitcoin mining is an excellent strategy to rebalance power grids,” Ye mentioned, referring to the truth that bitcoin miners can simply change their rigs on and off once more. Some jurisdictions, like Texas, benefit from 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 can 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 most important publicly traded miner on the earth, owned a bit of over 47 EH/s value of computing energy as of November, per TheMinerMag knowledge. 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 resolution 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 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 ensure the websites run easily.
“Although we enter the trade 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 mentioned. “So firstly, we selected to work along with Bitmain and to make use of its operations groups.”
That state of affairs is prone to change over time, Ye mentioned, 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 crew 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 depend upon how the 12 months unfolds, Ye mentioned. “We don’t rule out the opportunity of making some tactical reductions [to the bitcoin holdings] primarily based on market situations,” she mentioned. Cango mined 363.9 BTC in November alone, a sum value roughly $35 million on the time of writing.
