Cango Acquires 50 EH/s Mining Power to Enter Bitcoin Industry
The bitcoin (BTC) mining industry saw a significant development in late 2024 with the entry of Cango (CANG), a Chinese company known for automobile financing. Valued at $363 million, Cango is acquiring 50 exahashes per second (EH/s) of mining power, positioning itself among the largest bitcoin miners globally.
Cango's initial acquisition involved a $256 million cash purchase of 32 EH/s from Bitmain, while it plans to issue $144 million in shares for an additional 18 EH/s from Golden TechGen and other sellers. Post-transaction, these sellers will hold approximately 37.8% of Cango.
Since diversifying into bitcoin mining, Cango's stock rose by over 362% to $4.56 by the end of 2024. This strategy has increased interest in the company, according to Juliet Ye, senior director of communications.
50 EH/s
Historically focused on issuing loans for car purchases, Cango has previously diversified into car exports and renewable energy projects before entering bitcoin mining. Ye mentioned that bitcoin mining can assist in balancing energy grids due to its ability to adjust operations based on energy demand.
With Bitcoin's hashrate at 823 EH/s, Cango’s contribution of 50 EH/s would represent about 6% of total computing power. For comparison, MARA Holdings (MARA) had over 47 EH/s, while CleanSpark (CLSK) and Riot Platforms (RIOT) reported 32 EH/s and 26 EH/s respectively.
Cango's management highlighted the mining industry's trend toward consolidation and the need for large-scale operations due to increasing mining difficulty and hardware requirements. Currently, Cango does not operate its own mining fleet but relies on Bitmain for infrastructure and operations across various global locations.
As Cango gains experience, it aims to enhance the efficiency of its mining operations and may eventually establish an in-house team. Future strategies regarding their bitcoin holdings will depend on market conditions, with recent data indicating that Cango mined 363.9 BTC in November, valued at approximately $35 million.