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

Shanghai-based automobile dealership Cango Inc. has pivoted to Bitcoin (BTC) mining, saying 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 belongings, positioning it as one of many prime gamers within the world Bitcoin mining trade.

Cango Joins BTC Mining Bigwigs

In keeping with 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 around the globe, a significant achievement given the agency solely just lately entered the sector.

Cango’s enlargement 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 setting with out the necessity to preserve its personal information facilities. That is particularly essential provided that crypto mining was formally prohibited in China in Might 2021 as a result of issues about monetary danger, power consumption, and environmental affect.

Apparently, even with the ban, Chinese language mining swimming pools nonetheless management an enormous chunk of the worldwide BTC hashrate, estimated by some consultants 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 alleged to contain the issuing of $144 million in widespread inventory, doubtlessly bringing the NYSE-listed motor dealership’s whole hashrate to 50 EH/s. This is able to permit Cango to doubtlessly match trade leaders akin to Marathon Digital Holdings.

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

Bitcoin Wager Pays Off

With BTC costs hovering across the $100,000 degree 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 consistent with the agency’s fixed reinvention of itself.

Based in 2010, it initially targeted on motorized vehicle financing earlier than shifting into automobile buying and selling as a result 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 consumers worldwide.

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