How Chinese Lending Firm Cango Became a Bitcoin Mining Giant

What To Know

• Cango, a leading Chinese automotive transaction service platform, ventured into Bitcoin mining in November 2024.
• The company invested a staggering $400 million to secure 50 EH/s of mining power, instantly establishing itself as one of the world’s largest Bitcoin miners.
• Cango currently depends heavily on Bitmain for operational support and infrastructure management.

Cango, a Shanghai-based automotive transaction and lending firm, stunned the cryptocurrency world in late 2024 by acquiring a massive 50 exahashes per second (EH/s) of Bitcoin mining power. This strategic move instantly positioned the company as one of the largest players in the Bitcoin mining sector, significantly broadening its business operations beyond automotive services.

From Auto Loans to Bitcoin Mining

Cango built its reputation as a platform for facilitating auto loans and exports, primarily serving Chinese consumers and banks. The company has steadily diversified its portfolio over the years, including investing in electric vehicle manufacturer Li Auto and exploring renewable energy projects. These ventures laid the groundwork for its bold entry into the high-stakes Bitcoin mining industry.

The decision to venture into Bitcoin mining wasn’t a spur-of-the-moment gamble. Cango’s leadership recognized the potential of blockchain technology and its alignment with renewable energy initiatives. The company viewed Bitcoin mining as a natural extension of its efforts to explore high-compute power applications while leveraging underutilized energy resources.

The $400 Million Investment in Bitcoin Mining

To achieve its ambitious goal, Cango invested $400 million to acquire its extensive mining fleet. The firm purchased 32 EH/s from the mining equipment manufacturer Bitmain for $256 million in cash. It acquired an additional 18 EH/s from Golden TechGen—a company led by former Bitmain CFO Max Hua—and other undisclosed sellers. This deal involved issuing $144 million worth of Cango shares, resulting in these sellers holding a 37.8% stake in the company.

These acquisitions ensured that Cango became a top-tier player in the Bitcoin mining sector, with a mining capacity that rivals leading firms like MARA Holdings (47 EH/s), Riot Platforms (32 EH/s), and CleanSpark (26 EH/s).

A Global Mining Operation

Cango’s mining machines are strategically distributed across multiple countries, including the United States, Canada, Paraguay, and Ethiopia. While the company currently relies on Bitmain for operational expertise and infrastructure, its management plans to build an in-house team over time. This shift is expected to reduce operational costs and improve long-term efficiency.

How Bitcoin Mining Benefits Cango

Cango’s leadership sees Bitcoin mining as more than a revenue stream. The firm considers it a strategic way to support energy grid balancing, particularly in regions with renewable energy surpluses. Bitcoin miners can operate during periods of low energy demand and shut down during high-demand periods, such as heatwaves or cold snaps.

This flexibility makes Bitcoin mining an attractive proposition for jurisdictions like Texas, where miners are incentivized to support grid stability. By embracing this model, Cango aligns its mining operations with broader renewable energy goals.

Financial Impact and Market Buzz

The diversification into Bitcoin mining has already paid dividends for Cango. In November 2024 alone, the company mined 363.9 BTC, worth approximately $35 million at the time. This new venture also sparked renewed interest in Cango’s stock, which soared more than 362% in 2024, closing the year at $4.56.

Cango’s management has expressed confidence in the long-term prospects of Bitcoin mining but remains open to tactical adjustments. The firm may sell portions of its mined Bitcoin depending on market conditions, ensuring financial flexibility and liquidity.

Future Plans and Industry Outlook

As the global Bitcoin hashrate nears 823 EH/s, Cango’s contribution of 50 EH/s accounts for roughly 6% of the total network power. This significant share underscores the company’s influence in the industry and highlights its potential for future growth.

Read more: What Does Hashrate Mean and Why Does It Matter?

Cango’s management aims to enhance its operations by nurturing in-house expertise and exploring innovations to optimize its mining fleet. While the company currently relies on Bitmain for day-to-day management, it envisions a transition to self-reliance, which will bolster its economic efficiency.

Cango’s foray into Bitcoin mining represents a pivotal moment for the firm and the broader cryptocurrency sector. By leveraging its financial resources and embracing blockchain technology, Cango is setting an example of how traditional companies can innovate and thrive in emerging industries.