The bitcoin (BTC) mining manufacture was shaken up successful the past months of 2024 by the abrupt entranceway of a caller player: Cango (CANG), a Chinese steadfast that specializes successful providing loans to automobile buyers.
Based successful Shanghai and valued astatine $363 cardinal connected the banal market, Cango is successful the process of acquiring 50 exahashes per 2nd (EH/s) worthy of mining power, meaning that the car lending level volition go 1 of the largest bitcoin miners successful the satellite erstwhile its full fleet goes online.
“I conjecture it’s astonishing for radical successful the [bitcoin mining] manufacture due to the fact that cipher has ever heard of Cango before,” Juliet Ye, the company’s elder manager of communications, told CoinDesk successful an interview. “But the past of Cango is simply a past of adaptation. We’ve diversified into antithetic areas astatine slightest 2 oregon 3 times [since the steadfast was established successful 2010].”
Getting specified a ample bitcoin mining fleet isn’t cheap. Cango paid $256 cardinal successful currency for the archetypal 32 EH/s worthy of computing power, which it purchased from bitcoin mining instrumentality shaper Bitmain. It volition beryllium issuing $144 cardinal worthy of shares for the remaining 18 EH/s, which it is acquiring from Golden TechGen — a steadfast owned by erstwhile Bitmain Chief Financial Officer Max Hua — arsenic good arsenic different undisclosed mining instrumentality sellers. Once the transaction is settled, Golden TechGen and these different sellers volition extremity up owning astir 37.8% of Cango.
The diversification into bitcoin mining is already bearing fruit. Cango’s banal finished 2024 astatine $4.56, up much than 362% from the commencement of that year. Even better, Ye said, this caller bitcoin mining strategy has catapulted Cango into the spotlight.
“It’s been truly hard for america to summation traction astir the company, arsenic a small- to mid-cap listed Chinese steadfast successful the U.S.,” Ye said. “All of a sudden, a batch of radical are precise overmuch funny successful Cango. The buzz astir the institution — we’ve ne'er seen this earlier successful the past.”
50 EH/s
Cango is much utilized to helping Chinese banks contented loans for radical looking to bargain cars. But the firm, which went nationalist successful 2018, was already diversifying its operations years earlier acquiring its bitcoin fleet.
Cango started facilitating car exports from China to different parts of the satellite and has invested successful Li Auto, a Chinese electrical conveyance manufacturer. Following that investment, Cango explored concern opportunities successful the renewable vigor sector, including high-compute powerfulness projects related to AI, earlier venturing into connected bitcoin mining.
“Bitcoin mining is simply a precise bully mode to rebalance vigor grids,” Ye said, referring to the information that bitcoin miners tin easy power their rigs disconnected and connected again. Some jurisdictions, similar Texas, instrumentality vantage of that quality by encouraging miners to run successful periods of debased vigor consumption, and paying them to unopen down their machines erstwhile section request surges, similar during heatwaves oregon blizzards.
With Bitcoin’s hashrate present hovering astatine 823 EH/s, Cango volition beryllium providing astir 6% of the full computing powerfulness down Bitcoin erstwhile the firm’s 50 EH/s afloat travel online. For reference, MARA Holdings (MARA), the largest publically traded miner successful the world, owned a small implicit 47 EH/s worthy of computing powerfulness arsenic of November, per TheMinerMag data. CleanSpark (CLSK) and Riot Platforms (RIOT), the 2 adjacent largest, stood astatine 32 EH/s and 26 EH/s respectively.
“The Bitcoin mining sector's imperative for scaled operations was a pivotal information successful our determination to participate this domain,” Cango’s absorption squad told CoinDesk successful an email.
“The existent scenery is marked by manufacture consolidation, with larger-scale operations becoming progressively ascendant owed to escalating mining trouble and the necessity for state-of-the-art hardware.”
One large quality betwixt Cango and different mining heavyweights is that Cango isn’t operating its ain mining fleet close now. With machines dispersed retired astir the satellite — including successful the U.S., Canada, Paraguay and Ethiopia — Cango is inactive relying heavy connected Bitmain for facilities and infrastructure, and to marque definite the sites tally smoothly.
“Even though we participate the manufacture with a important magnitude of computing power, we are inactive caller here, and we request clip to accommodate to the norms, and get a amended knowing of the taxation concern and the remainder of the market,” Ye said. “So astatine the beginning, we chose to enactment unneurotic with Bitmain and to usage its operations teams.”
That concern is apt to alteration implicit time, Ye said, arsenic Cango gains acquisition successful the assemblage and seeks to marque its bitcoin mining operations much economically efficient. Nurturing an in-house mining squad would apt beryllium cheaper than relying connected Bitmain’s expertise successful the agelong run.
As for what Cango plans to bash with its increasing bitcoin stash, that volition beryllium connected however the twelvemonth unfolds, Ye said. “We don’t regularisation retired the anticipation of making immoderate tactical reductions [to the bitcoin holdings] based connected marketplace conditions,” she said. Cango mined 363.9 BTC successful November alone, a sum worthy astir $35 cardinal astatine the clip of writing.