Chinese Auto Dealer Dives Into Bitcoin Mining With $256 Million Investment

Shanghai-based car dealer Cango Inc. has moved into Bitcoin (BTC) mining, announcing a $256 million acquisition of 32 exahashes per second (EH/s) hashrate from Bitmain Technologies.

In November, the company mined 363 BTC, worth about $36 million, without liquidating any assets, positioning it as a major player in the global Bitcoin mining industry.

Cango Joins BTC Mining Bigwigs

According to The MinerMag, the move makes Cango the fifth largest public Bitcoin miner by realized hashrate and the third largest by deployed hashrate. Its production represents 4% of BTC mined daily worldwide, a significant achievement given that the company only recently entered the industry.

Cango’s expansion into BTC mining is supported by strategic acquisitions. Bitmain’s initial purchase, including rack miners, is hosted in the US, possibly in Georgia, under an 18-month placement agreement.

This contract allows the company to host its hardware with a service provider in a secure and managed environment without the need to maintain its own data centers. This is especially important given that crypto mining was officially banned in China in May 2021 due to concerns about financial risk, energy consumption and environmental impact.

Interestingly, even with the ban, Chinese mining pools still control a large portion of the global BTC hashrate, estimated by some experts at around 55%.

Cango also plans to get another 18 EH/s from Golden TechGen, a company owned by ex-Bitmain CFO Max Hua. The deal, which is set to close by the end of March 2025, is said to involve the issuance of $144 million in common stock, which could lift the NYSE-listed motor dealer’s total hashrate to 50 EH/ s. This would allow Cango to potentially match industry leaders such as Marathon Digital Holdings.

Speculation is rife that the hardware in question will include Bitmain’s Antminer S19XP platforms, purchased at a relatively competitive price of $8 per terahash per second (TH/s).

Bitcoin bet pays off

With BTC prices hovering around the $100,000 level and the network’s hash price rebounding to $63 per petahash per second (PH/s), Cango’s venture into crypto seems timely. While it also marks a dramatic shift from the company’s origins as an auto transaction service provider, it’s in keeping with the company’s constant reinvention.

Founded in 2010, it initially focused on motor vehicle financing before moving into auto trading due to regulatory pressures in China. Earlier this year, it further diversified its operations, launching AutoCango.com, a platform that offers used Chinese cars to buyers around the world.

However, Cango has acknowledged that its new BTC mining operation may dominate its revenue streams in the near term, especially given that its initial company revenue exceeded its Q3 revenue of 3.84 millions of dollars many times over. The performance pushed the company’s share price from $3.41 to $6.91, increasing its market capitalization to $500 million.

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