Chinese language Auto Seller Dives Into Bitcoin Mining With $256M Funding

Shanghai-based automobile dealership Cango Inc. has pivoted to Bitcoin (BTC) mining, asserting a $256 million acquisition of 32 exahashes per second (EH/s) in hashrate from Bitmain Applied sciences.

In November, the corporate extracted 363 BTC, value about $36 million, with out liquidating any property, positioning it as one of many high gamers within the world Bitcoin mining business.

Cango Joins BTC Mining Bigwigs

In response to The MinerMag, the transfer makes Cango the fifth-largest public Bitcoin miner by realized hashrate and the third-biggest by deployed hashrate. Its manufacturing accounts for 4% of the BTC mined every day world wide, a serious achievement given the agency solely not too long ago entered the sector.

Cango’s growth into BTC mining is backed by strategic acquisitions. The preliminary buy from Bitmain, together with on-rack miners, is reportedly hosted within the U.S., probably in Georgia, below an 18-month colocation settlement.

Such a contract permits the corporate to deal with its {hardware} with a service supplier in a safe and managed atmosphere with out the necessity to keep its personal knowledge facilities. That is particularly essential on condition that crypto mining was formally prohibited in China in Might 2021 as a consequence of considerations about monetary danger, vitality consumption, and environmental affect.

Curiously, even with the ban, Chinese language mining swimming pools nonetheless management an enormous chunk of the worldwide BTC hashrate, estimated by some specialists to be round 55%.

Cango additionally plans to safe one other 18 EH/s from Golden TechGen, an organization owned by ex-Bitmain CFO Max Hua. The deal, anticipated to be finalized by the top of March 2025, is claimed to contain the issuing of $144 million in frequent inventory, doubtlessly bringing the NYSE-listed motor dealership’s whole hashrate to 50 EH/s. This is able to enable Cango to doubtlessly match business leaders equivalent to Marathon Digital Holdings.

Hypothesis is rife that the {hardware} in query will embody Bitmain’s Antminer S19XP rigs, purchased at a comparatively aggressive $8 per terahash per second (TH/s).

Bitcoin Guess Pays Off

With BTC costs hovering across the $100,000 stage and the community hashprice rebounding to $63 per petahash per second (PH/s), Cango’s enterprise into crypto seems well-timed. Whereas it additionally marks a dramatic shift from the corporate’s origins as an automotive transaction service supplier, it’s in line with the agency’s fixed reinvention of itself.

Based in 2010, it initially centered on motorized vehicle financing earlier than transferring into automobile buying and selling as a consequence of regulatory pressures in China. Earlier within the yr, it diversified its operations additional, launching AutoCango.com, a platform providing used Chinese language automobiles to patrons worldwide.

Nonetheless, Cango has acknowledged that its new BTC mining operation might dominate its income streams within the close to time period, particularly on condition that its preliminary earnings from the enterprise surpassed its Q3 income of $3.84 million many instances over. The efficiency pushed the corporate’s inventory value from $3.41 to $6.91, boosting its market cap to $500 million.