In the final months of 2024, Cango (CANG), a Chinese company known for providing loans to automobile buyers, made a big move into the bitcoin mining industry, marking its entrance as a major player in the space.
Cango, based in Shanghai and valued at $363 million on the stock market, is in the process of acquiring 50 exahashes per second (EH/s) of mining power. This acquisition will position the firm as one of the largest bitcoin miners globally once its entire fleet is fully operational.
“It’s surprising for people in the bitcoin mining industry because no one had heard of Cango before,” Juliet Ye, the company’s senior director of communications, told CoinDesk in an interview. “But Cango’s history has always been about adaptation. We’ve diversified into various areas at least two or three times since we were established in 2010.”
However, the expansion into bitcoin mining comes at a steep price. Cango invested $256 million in cash to acquire the first 32 EH/s of mining power, purchasing it from Bitmain, a leading bitcoin mining machine manufacturer. For the remaining 18 EH/s, Cango is issuing $144 million in shares to acquire power from Golden TechGen, a company owned by former Bitmain CFO Max Hua, as well as other undisclosed sellers. After the transaction, Golden TechGen and these sellers will own approximately 37.8% of Cango.
Cango’s move into bitcoin mining has already yielded impressive results. The company’s stock price soared over 362% in 2024, finishing the year at $4.56. Ye notes that this shift into mining has propelled Cango into the public eye in ways it hadn’t experienced before.
“It’s been challenging for us to gain traction as a small- to mid-cap listed Chinese firm in the U.S.,” Ye explained. “But now, suddenly, there’s a lot of interest in Cango. We’ve never seen this level of buzz around the company before.”
While Cango is traditionally focused on helping Chinese banks issue loans for car buyers, it has been diversifying for years. The company went public in 2018 and has since explored various sectors, including facilitating car exports and investing in Li Auto, a Chinese electric vehicle manufacturer. Cango has also dabbled in the renewable energy sector, including high-performance computing projects related to AI, before ultimately entering bitcoin mining.
Ye highlighted the synergy between bitcoin mining and energy grid management, noting that miners can adjust their operations to optimize energy consumption. In places like Texas, bitcoin miners are incentivized to shut down their rigs during periods of high energy demand, such as heatwaves or blizzards, contributing to energy grid stability.
As of now, Bitcoin’s hashrate is around 823 EH/s, and once Cango’s 50 EH/s are fully online, the company will provide about 6% of the network’s total computing power. To put this in perspective, MARA Holdings (MARA), the world’s largest publicly traded bitcoin miner, had slightly over 47 EH/s as of November, with CleanSpark (CLSK) and Riot Platforms (RIOT) at 32 EH/s and 26 EH/s, respectively.
“The need for scaled operations in the bitcoin mining sector was a key factor in our decision to enter the industry,” Cango’s management team explained in an email to CoinDesk. “The market is seeing consolidation, with larger operations becoming dominant due to increasing mining difficulty and the need for cutting-edge hardware.”
Unlike other mining giants, Cango is not yet operating its own mining facilities. The company’s machines are spread across several countries, including the U.S., Canada, Paraguay, and Ethiopia. Initially, Cango is relying heavily on Bitmain for its facilities, infrastructure, and operations management.
“Although we’ve entered the industry with significant computing power, we’re still new here,” Ye noted. “We need time to adapt to the industry standards and gain a better understanding of the tax situation and other market dynamics. At the start, we chose to partner with Bitmain and leverage its operational expertise.”
