Chinese auto finance company Cango emerges as bitcoin mining giant
Chinese auto finance company Cango has expanded into the “bitcoin mining” industry and has become one of the largest players in the space. In late 2024, Cango acquired 50 EH/s (exahashes per second) of bitcoin hashrate, one of the largest deals in the industry’s history.
Cango, a Chinese automotive transaction platform Based in Shanghai and with a market cap of around $363 million, it entered the Bitcoin mining scene in November 2024, spending $400 million to purchase 50 EH/s of hashrate, instantly becoming one of the largest Bitcoin miners in the world. Cango also has a close partnership with Bitmain, a Bitcoin mining rig manufacturer.
Cango paid $256 million in cash to buy 32 EH/s of hashrate from bitcoin miner maker Bitmain, and also issued $144 million in shares to buy another 18 EH/s of hashrate from Golden TechGen, a company owned by former Bitmain CFO Max Hua, as well as other miner vendors. When the transaction closes, Golden TechGen and other vendors will own approximately 37.8% of Cango.
Cango’s foray into bitcoin mining has paid off, with the company’s stock price closing 2024 at $4.56, up more than 362% from the start of the year. The move has attracted significant market and investor interest.
Cango was once just a player in the auto finance market before expanding into various areas, such as exporting cars from China to the rest of the world, investing in Chinese electric car maker Li Auto, before entering renewable energy and bitcoin mining.
Juliet Ye, Senior Director of Communications at Cango specify that “Bitcoin mining is a great way to balance the energy system. Bitcoin miners can turn their mining rigs on and off based on local energy demand. For example, the state of Texas encourages bitcoin mining during low energy consumption periods and pays miners to turn their rigs off during high energy demand periods.”
When all of Cango’s miners are fully operational, Cango will hold about 6% of the total Bitcoin network hashrate. For comparison, MARA Holdings, the largest Bitcoin miner in the market, holds about 47 EH/s, while CleanSpark and Riot Platforms hold 32 EH/s and 26 EH/s, respectively.
However, Cango still relies on Bitmain to manage and maintain its bitcoin mining operations, with the company’s mining rigs deployed in locations around the world, including the US, Canada, Paraguay, and Ethiopia. Cango aims to build its own mining teams in the future to increase efficiency and reduce costs.
In November, Cango mined 363.9 bitcoins, worth around $35 million. Cango said they would not rule out the opportunity to sell some of their bitcoins if the market were to allow it.
Cango’s entry into the bitcoin mining industry is a sign of the growing acceptance of cryptocurrency at the enterprise level. The company plans to continue expanding its operations and may integrate blockchain technology into its financial services in the future. This move not only diversifies Cango’s revenue stream, but also demonstrates the growing adoption of crypto and its growing adoption at the enterprise level across the globe.
refer : coindesk.com
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