“How Cango, a Chinese Lending Firm, Built a Dominant Presence in Bitcoin Mining”

In the final months of 2024, Cango (CANG), a Shanghai-based firm primarily known for offering automotive financing, made a bold move into the bitcoin mining industry, positioning itself as one of the largest players in the sector.

Cango, which is valued at $363 million on the stock market, is currently in the process of acquiring a massive 50 exahashes per second (EH/s) of bitcoin mining power. Once fully integrated, this expansion will make Cango one of the most formidable bitcoin mining companies globally.

“It’s a surprise to many in the mining industry because Cango hasn’t been known for bitcoin mining before,” said Juliet Ye, Cango’s Senior Director of Communications, in an interview with CoinDesk. “But Cango has always been a company that adapts and diversifies. We’ve reinvented ourselves several times since our founding in 2010.”

To build its mining operation, Cango paid $256 million in cash for the first 32 EH/s of mining power, which it acquired from leading mining hardware producer Bitmain. For the remaining 18 EH/s, the company is issuing $144 million in shares to Golden TechGen, a company owned by former Bitmain CFO Max Hua, and other undisclosed mining hardware providers. This deal will result in Golden TechGen and other sellers holding around 37.8% of Cango’s equity.

Cango’s foray into bitcoin mining has already paid dividends in terms of market interest. The company’s stock saw a remarkable surge of 362% throughout 2024, closing the year at $4.56 per share. Ye noted that the attention surrounding the company has skyrocketed since its entry into mining.

“Before this, it was tough for us to generate interest, as a mid-cap Chinese firm listed in the U.S.,” Ye explained. “But now, we’re seeing an unprecedented level of buzz around Cango and its new direction.”

Though Cango has long been involved in car financing, its diversification efforts have been ongoing. In addition to facilitating international car exports, the company made a strategic investment in Li Auto, a Chinese electric vehicle maker. Cango also explored opportunities in the renewable energy sector and high-computing AI power solutions, before eventually setting its sights on bitcoin mining.

Ye believes bitcoin mining presents an efficient way to stabilize energy usage, given the sector’s flexibility. “Bitcoin mining can help balance energy grids,” she explained. “Miners can quickly turn off rigs during high-demand periods, which helps regions like Texas manage energy fluctuations and incentivizes miners to pause operations during peak times, such as heatwaves or storms.”

With Bitcoin’s current network hashrate standing at approximately 823 EH/s, Cango’s 50 EH/s will contribute about 6% of the total network’s mining power once its operations are fully online. By comparison, the largest publicly traded miner, Marathon Digital Holdings (MARA), operates around 47 EH/s, while CleanSpark (CLSK) and Riot Platforms (RIOT) are running at 32 EH/s and 26 EH/s, respectively.

Cango’s management team emphasized that scaling operations was a critical factor in entering the bitcoin mining sector. “The industry is undergoing consolidation, with large-scale operations becoming dominant due to increasing mining difficulty and the need for state-of-the-art equipment,” they said.

Unlike many of its peers, however, Cango is not yet operating its own mining sites. The company’s rigs are distributed across various countries, including the U.S., Canada, Paraguay, and Ethiopia. Cango is partnering with Bitmain for facility management, infrastructure, and operational support as it gets acclimated to the bitcoin mining ecosystem.

“Despite entering the industry with substantial computing power, we’re still learning and adapting,” Ye admitted. “We’re working with Bitmain and its expert teams to ensure the smooth operation of our mining operations as we grow our presence in the market.”

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