Cango Inc., a leading automotive transaction service platform based in Shanghai, made a significant move in the crypto mining industry by completing a $256 million cash-settled acquisition of on-rack crypto mining machines with 32 EH/s of hashrate from Bitmain. This acquisition was part of the company’s strategy to diversify its business and venture into the world of cryptocurrency mining.
The deal with Bitmain also included a proposed $144 million share-settled acquisition of additional on-rack mining machines with 18 EH/s of hashrate from Golden TechGen. These transactions were aimed at bolstering Cango’s position in the crypto mining sector and expanding its revenue streams.
Cango specifically purchased the on-rack miners from Bitmain Technologies Georgia Limited and Bitmain Development Limited, indicating a potential ongoing partnership with Bitmain as a colocation provider. The cash-settled transaction with Bitmain was successfully concluded after meeting all closing conditions, while the share-settled transaction was still pending closure.
The deployment of the newly acquired Bitcoin miners resulted in impressive production numbers for Cango Inc. In November alone, the company mined 363.9 BTC, making it the third-largest publicly traded company by deployed hashrate and the fifth-largest by realized hashrate. With an average production of 18.85 BTC per day and an average operating hashrate of 29.75 EH/s, Cango’s foray into Bitcoin mining proved to be a lucrative venture.
Although the specific model of the on-rack mining machines from Bitmain was not disclosed, the unit cost of $8 per TH/s suggested that they may have acquired the Antminer S19XP series. Blockspace Media confirmed that Cango’s initial fleet of miners consisted entirely of Antminer S19XPs, further solidifying the company’s commitment to high-quality mining equipment.
The success in Bitcoin mining also reflected positively on Cango Inc.’s financial performance. The company reported a Q3 revenue of $3.84 million as of November 30, with Bitcoin mining revenue in November surpassing that of the entire second quarter of 2024. This growth trajectory was mirrored in the stock price, which soared from $3.41 in mid-November to $6.91 by December 17, resulting in a market cap exceeding $500 million.
Jiayuan Lin, CEO of Cango, attributed the company’s strong performance to stringent cost control and risk management strategies, emphasizing the importance of operational efficiency. He highlighted Cango’s focus on high-quality projects that align with its core competencies and expressed a commitment to enhancing data analysis capabilities for better market insights.
In conclusion, Cango Inc.’s foray into Bitcoin mining has been a resounding success, showcasing the company’s ability to adapt to new industries and drive growth through strategic acquisitions. With a solid foundation in place, Cango is poised for continued success in the evolving landscape of cryptocurrency and blockchain technology.