Chinese market is dismal! Shanghai used car dealer Cango spends 400 million pounds to "enter the US BTC Mining" and its stock price unexpectedly big pump by 84%.

Shanghai-based automotive trading services Cango announced its foray into BTCMining, spending $400 million to acquire 50 EH/s Computing Power, making it one of the world's largest miners. Juliet Ye, director of communications at Cango, said in an interview with CoinDesk yesterday that the move is aimed at seeking to diversify revenue streams. (Synopsis: Ethiopian Power Company "18% of its revenue comes from BTCMining", a new paradise for low-cost hydroelectric mine-forming enterprises) (Background added: Russia announces a ban on mining in 10 regions until 2031, fearing that the grid will be squeezed dry) Shanghai-based auto trading service Cango Inc. (NYSE: CANG) announced its entry into cryptocurrency mining in November, sparking curiosityThe details of the deal, and Cango's personnel finally explained recently why Chinese companies chose to bypass the domestic mining ban and invest in BTCMining overseas. China's economic slowdown spurs overseas expansion? According to reports, the recent economic situation of China is not very optimistic, the economic data of first-tier cities in Shanghai and Beijing have deflation, the average consumption amount has fallen by 14~18%, and the situation in second-tier cities is even worse, which makes the operation of traditional industries dominated by China's domestic demand disturbed. Cango's latest financial report shows a sharp decline in revenue from its traditional business. As of the third quarter of 2024, the total revenue was only 27 million yuan (about 3.8 million US dollars), a decline of 92.36% compared with the 353.6 million yuan in the same period in 2023, which may be the reason why Cango finally chose to "escape China" to operate overseas markets. How to make money from car loan to BTCMining? Recently, Juliet Ye, director of communications at Cango, said in an interview with CoinDesk yesterday (3) that for the BTCMining industry, he guessed that the market would be surprised because no one had heard of Cango before. But Cango's history is a history of adaptation and transformation. Since our founding in 2010, we have made at least two or three transformations to diversify our business. Cango used to provide auto loan services mainly to Chinese banks, but it has diversified its business long before it entered BTCMining. First of all, Cango began to promote the export of Chinese cars to overseas markets and invested in Li Auto in China's electric vehicle sector. Subsequently, the company further ventured into the renewable energy sector, exploring high computing power projects related to artificial intelligence (AI), and eventually entered the BTCMining business. According to Juliet Ye, BTCMining is an effective way to balance the energy grid: BTCMiner can flexibly turn mining equipment on or off, for example in Texas, where local governments take advantage of this feature to encourage Miner to run equipment when energy demand is low, and pay a fee to shut down Miner during peak demand periods (such as heat waves or blizzards), thereby stabilizing grid loads. How do Chinese companies operate mining companies? Despite having large-scale computing power, Cango says the company is still Newbie in the space, adapting to industry norms and understanding tax and market conditions, so the main difference between Cango and other mining giants is that Cango does not currently operate its own mining equipment, choosing instead to partner with Bitmain and use its operations team to ensure smooth operations. According to the press release at the time, these mining rigs will not be deployed within the ban on mining, but will be contracted by Cango to take over Bitmain's mining rigs that have been deployed online in the United States. Anonymous mining experts said that this is usually a form of buying out cloud computing power, but the ownership of Mining Rig belongs to Cango, and the operation and mining entities are in the United States, which is responsible for Bitmain, which can save the legal risk that Chinese companies cannot operate BTCMining, because in fact, Chinese companies Cango will only get overseas Fiat after mining Currency income. Cango, which expects to develop an in-house mining team to make its BTCMining business more cost-effective, said it has no clear plans for what it will do with the mined BTC, but does not rule out the possibility of selling according to market conditions. So far, Cango has mined a total of 363.9 BTC in November and 569.9 in December, increasing its BTC holdings to 933.8 BTC, with a current value of about $91.51 million. No BTC has been sold. The company's average Computing Power was 30.4 EH/s, up 2% quarter-over-quarter. The stock price has risen since the foray into mining, and the entry into BTCMining has inspired Cango's share price to rise. The company's share price closed at $4.56 in 2024, up more than 362% from the beginning of the year, and tentatively traded at $5.25 before the deadline, which is up 84% in about two months compared to the stock price in early November. According to Juliet Ye, this new mining strategy has catapulted Cango into the spotlight. As a small and medium-sized Chinese company listed in the United States, it used to be difficult for us to attract outside attention, but now, suddenly many people are showing great interest in Cango, and the buzz about the company is something we have never seen before. Become one of the world's largest miners According to TheMinerMag a few days ago, Cango originally purchased the first 32 EH/s of Computing Power from BTCMining Rig manufacturer Bitmain (Bit Continent) for $256 million in cash, and has agreed to acquire an additional 18 EH/s from Golden TechGen and other entities through $144 million worth of common shares in issuance. s Computing Power. As a result, Cango spent a total of $400 million on 50 EH/s of Computing Power, making it one of the largest miners in the world. BTC's Computing Power is currently hovering at 753.11 EH/s, which means that once Cango's 50 EH/s is fully live, it will provide about 6.6% of the Computing Power behind BTC. For comparison, MARA Holdings (MARA), the world's largest publicly traded miner, had just over 47 EH/s of Computing Power as of November, followed by CleanSpark (CLSK) and Riot Platforms (RIOT) with 32 EH/s and 26 EH/s, respectively, according to TheMinerMag. Related reports Alipay now encryption advertising is a precursor to the lifting of the ban? Lawyer: China may open up coin franchising, but mining and coin issuance are still early, Malaysia exploded many landlords were "stolen electricity mining"! Electricity bills broke Taiwan coin 2 million, selling houses is not enough to pay back Viewpoint" If the United States becomes BTCMining, AI center, UHV transformers will become Trump's new concept stocks "The Chinese market is miserable! Shanghai second-hand car dealer Cango spent 400 million magnesium to "enter the United States BTCMining", and the stock price soared by 84%" This article was first published in BlockTempo "Dynamic Trend - The Most Influential Block Chain News Media".