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

In November, the company extracted 363 BTC, worth about $36 million, without liquidating any assets, positioning it as one of the top players 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-biggest by deployed hashrate. Its production accounts for 4% of the BTC mined daily around the world, a major achievement given the firm only recently entered the sector.

Cango’s expansion into BTC mining is backed by strategic acquisitions. The initial purchase from Bitmain, including on-rack miners, is reportedly hosted in the U.S., possibly in Georgia, under an 18-month colocation agreement.

Such a contract allows the company to house 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 prohibited 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 huge chunk of the global BTC hashrate, estimated by some experts to be around 55%.

Cango also plans to secure another 18 EH/s from Golden TechGen, a company owned by ex-Bitmain CFO Max Hua. The deal, expected to be finalized by the end of March 2025, is said to involve the issuing of $144 million in common stock, potentially bringing the NYSE-listed motor dealership’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 rigs, bought at a relatively competitive $8 per terahash per second (TH/s).

Bitcoin Bet Pays Off

With BTC prices hovering around the $100,000 level and the network hashprice rebounding to $63 per petahash per second (PH/s), Cango’s venture into crypto appears well-timed. While it also marks a dramatic shift from the company’s origins as an automotive transaction service provider, it is in keeping with the firm’s constant reinvention of itself.

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

However, Cango has acknowledged that its new BTC mining operation may dominate its revenue streams in the near term, especially given that its initial income from the venture surpassed its Q3 revenue of $3.84 million many times over. The performance pushed the company’s stock price from $3.41 to $6.91, boosting its market cap to $500 million.