In late 2024, the Bitcoin (BTC) mining industry witnessed a surprising new entrant: Cango (CANG), a Shanghai-based company traditionally known for providing automobile loans. Despite its roots in financial services, Cango is now poised to become a major player in the Bitcoin mining world, acquiring an impressive 50 exahashes per second (EH/s) of mining power—enough to rank among the largest miners globally.
A Surprising Shift
Valued at $363 million on the stock market, Cango’s diversification into Bitcoin mining came as a shock to industry insiders.
"I guess it’s surprising for people in the [Bitcoin mining] industry because nobody has ever heard of Cango before," said Juliet Ye, Senior Director of Communications, in an interview with CoinDesk. "But the history of Cango is a history of adaptation. We’ve diversified into different areas at least two or three times since the firm was established in 2010."
The Investment
Cango’s foray into mining required significant investment. The company spent $256 million in cash for 32 EH/s of mining power purchased from Bitmain, a leading mining machine manufacturer. To acquire the remaining 18 EH/s, Cango is issuing $144 million in shares to Golden TechGen—a company owned by former Bitmain CFO Max Hua—and other undisclosed sellers. These entities will collectively own about 37.8% of Cango once the transaction is complete.
Immediate Impact
Cango’s bold strategy has already paid off. Its stock price surged by over 362% in 2024, closing the year at $4.56. "It’s been really hard for us to gain traction as a small- to mid-cap listed Chinese firm in the U.S.," Ye said. "But now, all of a sudden, a lot of people are very much interested in Cango. The buzz around the company—we’ve never seen this before."
From Cars to Cryptocurrencies
Though primarily an auto loan provider, Cango has a history of diversification. It has facilitated car exports, invested in Chinese electric vehicle maker Li Auto, and explored renewable energy projects before venturing into high-compute power industries like artificial intelligence.
Bitcoin mining was the next logical step, given its alignment with renewable energy initiatives. "Bitcoin mining is a very good way to rebalance energy grids," Ye explained, highlighting how miners can adjust operations based on energy demand.
Cango’s Role in the Bitcoin Network
With Bitcoin’s current global hashrate at 823 EH/s, Cango’s fleet will contribute roughly 6% of the network's total computing power once fully operational. This would place it ahead of industry heavyweights like CleanSpark (32 EH/s) and Riot Platforms (26 EH/s) and just above MARA Holdings’ 47 EH/s.
Leveraging Bitmain’s Expertise
Unlike other major miners, Cango doesn’t yet operate its mining fleet independently. Its machines are distributed across facilities in the U.S., Canada, Paraguay, and Ethiopia, with Bitmain handling infrastructure and site management. "We’re new here and need time to adapt to the norms and understand the tax situation and market dynamics," Ye said. However, Cango aims to eventually build its own in-house mining team to improve efficiency and reduce reliance on Bitmain.
Future Plans
Cango’s approach to its growing Bitcoin holdings remains flexible. The company mined 363.9 BTC in November alone, valued at approximately $35 million at the time. "We don’t rule out the possibility of making some tactical reductions [to the Bitcoin holdings] based on market conditions," Ye noted.
Conclusion
Cango’s bold leap into Bitcoin mining underscores its adaptability and ambition to capitalize on emerging industries. As the firm gains experience and scales its operations, its impact on the Bitcoin mining sector could be transformative. For now, its diversification strategy appears to be a game-changer, boosting both its profile and bottom line.