Cango Inc. pivoted from vehicle buying and selling to Bitcoin mining and is now focusing on 50 EH/s in early 2025. With a rising BTC treasury, Tencent as an institutional investor, and Bitmain hyperlinks, is that this the mining sector’s subsequent darkish horse?
A Cango Deep Dive
The next visitor put up comes from Bitcoinminingstock.io, the one-stop hub for all issues bitcoin mining shares, academic instruments, and business insights. Initially revealed on Mar. 25, 2025, it was penned by Bitcoinminingstock.io writer Cindy Feng.
It’s been a number of weeks since our final deep dive into lesser-known names within the Bitcoin mining house. I’ve been a bit quiet—partly as a result of the sector’s been in a droop, but additionally as a result of I’ve been recovering from a lower-back harm (a reminder to take heed to your physique and never push it too exhausting with bodily actions).
For the second instalment of this sequence, I wish to discuss Cango Inc. (NYSE: CANG). Why? Whereas the entire mining sector has been taking a beating these days, Cango has had a number of robust days, boosted by its share buyback announcement and a non-binding buyout supply.
Bitcoin Mining Shares Heatmap (stay updates)
However right here’s what actually caught my eye: just some months in the past, this was nonetheless an vehicle buying and selling platform with restricted progress potential. Now, it focusing on 50 EH/s early this yr, with 32 EH/s already on-line.
So how is that this daring pivot taking part in out? And will Cango quietly turn out to be a serious participant within the house? Let’s dive in.
Firm Overview
Cango Inc. (NYSE: CANG) started as an Shanghai-based auto financier and later positioned itself as a key participant in China’s vehicle buying and selling providers. By late 2023, the corporate has shifted its focus from the home market to facilitating used automotive gross sales from China to creating markets. Then in November 2024, Cango introduced its entry into Bitcoin mining, launching operations with 32 EH/s of on-line hash fee. The dimensions and immediacy of this transfer shocked many traders—putting Cango simply behind MARA and CleanSpark, and making it the third-largest public Bitcoin miner by deployed capability on the time.
Overview of Public Miners’ Hash Price
The mining acquisition deal was for 50 EH/s in complete, with the remaining 18 EH/s anticipated to come back on-line in Q1 2025, topic to the efficiency standards outlined within the settlement. Notably, the infrastructure was not constructed from scratch: Cango acquired operational ASIC fleets instantly from Bitmain, and a Bitmain affiliate continues to handle the machines’ operations and upkeep inside third-party internet hosting services.
In accordance with firm disclosures, Cango has its fleet primarily hosted within the U.S.,East Africa, Oman and Paraguay – which retains it clear from China’s ongoing crypto restrictions.
Monetary Highlights
Income & Profitability Transformation
The affect of Cango’s pivot to Bitcoin mining is clearly mirrored in its newest monetary outcomes. In This autumn 2024, the corporate reported income of RMB 668 million ($91.5 million), a 414% YoY enhance. This progress was virtually solely pushed by Bitcoin mining, which accounted for 98% of complete income. In distinction, the car buying and selling phase, as soon as Cango’s core enterprise, simply contributed RMB 15 million ($2.1 million) – a sign that this legacy phase is successfully being phased out.
Regardless of the income surge, profitability stays a key difficulty. Cango posted a gross margin of 17.6% in This autumn—considerably under friends with related operational scale. For comparability, CleanSpark, which operates in a comparable hash fee vary, reported a 57% gross margin throughout the identical interval. This means that Cango’s value construction is way from optimized. Reliance on third-party internet hostingand publicity to greater power prices are two main attributors.
The corporate’s common Bitcoin manufacturing value stood at $67,769 per BTC(money value contains power and internet hosting charges). This determine locations Cango towards the greater finish of the price curve amongst giant public miners we monitor – lots of whom report all-in prices within the $50K vary. Till Cango secures lower-cost infrastructure or negotiates extra favorable internet hosting phrases, its margin profile is prone to stay below stress, even when income progress continues.
Stability Sheet & Liquidity
Cango entered 2025 in a robust liquidity place, reporting RMB 2.5 billion ($345 million) in money and short-term investments as of December 31, 2024 – up from RMB 1.7 billion ($232.9 million) the earlier yr. This substantial reserve offers a significant buffer for continued growth and cushions towards potential volatility in Bitcoin markets. Nevertheless, the corporate’s complete liabilities additionally rose sharply, rising 126% YoY to RMB 1.88 billion ($258 million). This rise was primarily pushed by accrued bills and different present liabilities tied to its mining acquisition and associated operations.
Whereas Cango at present has sufficient liquidity to fund near-term progress, the stress now shifts to enhancing operational margins. With out stronger money movement technology, the corporate might ultimately want to hunt exterior capital, risking fairness dilution or elevated leverage.
A better take a look at the fairness construction highlights these trade-offs. Shareholders’ fairness elevated 7.1% YoY to RMB 4.09 billion ($559.9 million), largely as a result of firm’s RMB 299.8 million ($41.1 million) web revenue in 2024. This return to profitability helped scale back the accrued deficit from RMB (335.6) million to RMB (35.8) million, strengthening the steadiness sheet and partially restoring retained earnings.
Nevertheless, the $144 million stock-based element of the $400 million mining machine acquisition considerably impacted fairness construction. It expanded complete fairness but additionally diluted present shareholders as the sellers, now fairness holders, collectively personal roughly 40% of the corporate post-transaction. This possession shift is mirrored within the decline of further paid-in capital from RMB 4.81 billion to RMB 4.73 billion, pointing to a redistribution of fairness relatively than contemporary capital influx.
Lastly, whereas the corporate repurchased 996,640 ADSs for $1.7 million, the buyback’s affect on complete fairness was negligible. It does, nonetheless, counsel that administration sees the inventory is undervalued, although present capital allocation stays firmly targeted on scaling the mining operation.
Valuation Modelling
A crucial step in understanding Cango’s price is to benchmark it towards related scale Bitcoin miners (e.g.,CleanSpark, Riot). As of Dec 31, 2024, Cango’s market cap stands at $424.77 million).
- Enterprise Worth (EV): $229.2 million (Market Cap + Debt – Money & Money Equal- BTC Holdings).
- EV/EBITDA Ratio: 17x ($384.47M/$22.8M)
- P/E: 7.7x
- P/S: 2.87x (very reasonable market optimism about income)
- BTC Holding / Market Cap: 21.1%
Mining Operations & Effectivity
Cango deployed 32 EH/s by December 2024 and is predicted to increase to 50 EH/s in Q1 2025. Projection of Bitcoin manufacturing in 2025:
- Manufacturing fee in This autumn 2024: 933.8 BTC in simply 50 days (November-December 2024).
- January-February 2025 replace: 1,010.9 BTC mined, confirming an approximate 500 BTC/month tempo at 32 EH/s.
- Scaling projection: If 32 EH/s produces ~6,000 BTC yearly, then 50 EH/s ought to yield ~8,500 BTC, assuming a linear scaling mannequin.
This projection is a best-case situation, excluding all variables- particularly the community issue. In actuality, rising world hash fee and elevated mining competitors might push community issue greater, which would scale back Cango’s BTC output and have an effect on income forecasts. The corporate’s publicity to such fluctuations is materials, given that almost all of its income is now tied to mining.
Fleet effectivity is one other space of concern. Cango reported an common of 21.6 J/TH, consisting of:
- 90% S19XP Hyd. fashions (water-cooled, environment friendly).
- 10% older fashions (greater energy consumption, much less aggressive).
In distinction, high miners have already begun transitioning to S21 sequence {hardware}, which gives considerably higher efficiency and power effectivity.
My Annual Mining Report exhibits that majority of huge public miners positioned orders for the S21 sequence throughout the first 9 months of 2024.
If Cango needs to stay aggressive, it could have to substitute older machinesand contemplate migrating from third-party internet hosting to self-operated infrastructure, which might enhance margins over time by decreasing internet hosting charges and power prices. With out such enhancements, its greater manufacturing value—already round $67,769 per BTC—might erode profitability in a tightening market.
Bitcoin Treasuries
Cango has clearly adopted a “Mine & Maintain” technique, opting to retain its Bitcoin relatively than liquidate for near-term money. As of December 2024, the corporate held 933.8 BTC (~$85 million at year-end costs). By February 2025, that determine had greater than doubled to 1,944.7 BTC, confirming lively accumulation.
Historic efficiency knowledge for miners is now out there in our premium options.
This treasury strategy gained additional visibility when Cango was added to the Bitwise Bitcoin Customary Companies ETF on March 18, 2025—an ETF that tracks public corporations holding 1,000 BTC or extra. Inclusion indicators institutional recognition and will enhance visibility amongst crypto-aligned traders.
Following the earlier assumption, Cango might mine ~ 8,500 BTC in 2025. Coupled with present holdings, its treasury might be ~9,500 BTC by year-end. By then, its Bitcoin holdings might attain almost $1 billion if BTC hits $100K, which probably locations Cango among the many largest public BTC holders on the earth, rivalling established mining companies and probably reshaping its valuation narrative.
Whereas this technique aligns with a long-term bullish view on Bitcoin, it introduces liquidity and steadiness sheet dangers. If Bitcoin costs drop considerably, Cango could also be pressured to promote BTC at unfavorable costs or depend on exterior financing to fund operations – particularly because the firm’s mining enterprise remains to be margin-sensitive and capital-intensive.
Non-Binding Buyout Provide: A Hidden Bitmain Play?
On March 14, 2025, Cango obtained a non-binding buyout supply from Enduring Wealth Capital Ltd. (EWCL). Little data is thought about this funding administration firm integrated within the British Virgin Islands, however key people from EWCL have hyperlinks to Bitmain, the world’s largest ASIC producer.
This raises some hypothesis:
- Is that this an try and separate Cango’s Bitcoin mining enterprise from its Chinese language company origins? Given China’s 2021 mining ban, a construction separation might scale back regulatory dangers and permit Cango to function extra freely.
- Is Cango successfully changing into a Bitmain-backed mining proxy? The corporate purchased the entire fleet from Bitmain’s present operations, with Bitmain associates persevering with to function and preserve these machines post-acquisition. Now, Bitmain-linked personnel are behind a buyout try.
If the deal goes by means of, Cango might have direct entry to Bitmain’s ASIC provide, decreasing {hardware} prices and boosting Cango’s aggressive edge, however can also see adjustments in possession construction that have an effect on present shareholders. Buyers ought to carefully watch whether or not the deal materializes and what phrases it contains, because it might essentially alter Cango’s company construction.
Last Ideas
Cango’s aggressive pivot into Bitcoin mining has essentially reshaped its company identification. It’s not an vehicle platform firm with reasonable progress prospects – it now ranks among the many largest Bitcoin miners by hash fee. It has a stack of BTC sitting on the steadiness sheet, which aligns with the rising “Bitcoin Treasury” pattern.
That mentioned, the story remains to be below growth. Core questions stay round operational effectivity , the soundness of Bitcoin costs, and the way successfully Cango can deploy its liquidity to optimize value constructions. For instance, transitioning from third-party internet hosting to self-mining infrastructure, as corporations like MARA have accomplished, might considerably enhance long-term margins. The current non-binding buyout supply from the entity linked to Bitmain additionally provides intrigue. If deeper integration with Bitmain materializes, it might grant Cango entry to discounted ASIC {hardware} and speed up fleet upgrades,
But challenges persist. Regardless of holding $345.3 million in money and short-term investments, which might cowl roughly 1.13 years of operations at present burn charges, the getting older fleet, primarily composed of second-hand S19 XP Hyd. fashions, faces quicker depreciation. As friends shift to S21 sequence machines, Cango might discover itself at an effectivity drawback if it doesn’t preserve tempo. Fleet depreciation might additional erode already skinny gross margins, particularly contemplating the This autumn report didn’t account for these prices.
Notably, Cango’s management workforce brings a robust monetary background, and its shareholder base contains Tencent as a top-11 holder – a reality usually missed by Western traders. Nevertheless, its headquarters in China continues to pose regulatory and geopolitical dangers, significantly because the mining ban in China stays in place.
Anybody desirous about CANG ought to monitor the next key elements:
- Bitcoin manufacturing value relative to friends
- Depreciation and turnover of older mining fleet
- Liquidity and volatility of BTC holdings below a “HODL” technique
- Influence of China-based operations on future strategic flexibility
- End result of the buyout supply and potential reference to Bitmain
Whether or not Cango can set up itself as a key participant within the sector, solely time will inform.
