Cango, the Chinese auto loan platform, has shaken up the Bitcoin mining market by investing 400 million dollars to acquire 50 EH/s of power. This move has positioned it among the global leaders in the sector.
Let’s see all the details in this article.
Cango and its transition to Bitcoin mining: a new era for the Chinese company
As anticipated, Cango, initially known as a financial services platform for the Chinese automotive market, has made its sensational entry into the Bitcoin mining sector.
With an investment of 400 million dollars and an acquisition of 50 exahash per second (EH/s) of computing power, Cango has quickly transformed into one of the largest Bitcoin miners in the world.
Founded in 2010 and based in Shanghai, the company was primarily known for its support of automotive loans.
However, diversification has always been a strength for Cango, which over time has explored sectors such as automobile export, electric vehicles, and renewable energy.
In November 2024, Cango decided to go further, purchasing 50 EH/s of mining power, a significant volume considering that it represents about 6% of the entire global Bitcoin hashrate.
This puts it in competition with industry giants like MARA Holdings and CleanSpark. Cango has chosen a strategic approach to obtain its mining fleet.
In fact, it spent 256 million dollars in cash to purchase 32 EH/s of computing power from Bitmain, one of the leading manufacturers of hardware for mining.
The remaining 18 EH/s were acquired through a combination of stock issuances and partnerships with Golden TechGen and other undisclosed providers.
This strategy has made Golden TechGen and the other sellers significant shareholders of Cango, owning about 37.8% of the company.
Despite the high cost of the operation, this move brought an immediate return: Cango’s shares increased by 362% in 2024, a success that put the company under the international spotlight.
The role of Bitmain and decentralized operations
Currently, Cango relies on Bitmain for the operational management of its mining fleet, which is distributed across various regions of the world, including the United States, Canada, Paraguay, and Ethiopia.
This initial dependency reflects the company’s cautious approach, which prefers to collaborate with an industry expert while becoming familiar with the bull market.
According to Juliet Ye, senior director of communications at Cango, the company plans to develop an internal team to optimize operations in the long term, thus reducing costs and increasing economic efficiency.
One of the most interesting aspects of Bitcoin mining is its ability to interact with energy networks. Miners can turn their machines on and off based on local energy demand, helping to balance the networks efficiently.
In some jurisdictions, such as Texas, miners are incentivized to operate during periods of low energy consumption and to turn off the machines during demand peaks.
Cango has recognized the potential of this model, exploring ways to integrate Bitcoin mining with renewable energy projects and high computing power systems, including those related to artificial intelligence.
Challenges and opportunities for the future between volatility and regulations
Despite its triumphant entry, Cango faces significant challenges. The volatile nature of the cryptocurrency market, combined with international regulatory complexities, represents an obstacle for the company.
Furthermore, the decentralized management of the bull mining fleet could present logistical and fiscal issues.
However, the opportunities outweigh the risks. With the global hashrate constantly increasing, Cango’s position as one of the leading providers of computing power places it in a strategic role in the Bitcoin ecosystem.
Not by chance, Cango has already started to see the fruits of its investment. In November 2024, the company mined 363.9 Bitcoin, worth about 35 million dollars.
While looking to the future, Cango does not rule out the possibility of selling a portion of its holdings in Bitcoin to finance additional investments or further diversify its portfolio.
