Key Highlights
Cango Inc. sold 2,000 Bitcoins in March, using the proceeds to repay its cryptocurrency-backed debt. Based on current market prices, this transaction generated approximately $143 million in revenue.
This strategic disposal reduced Cango's total debt burden to $30.6 million. As of March 31, the company still holds 1,025.69 BTC in its financial reserves, with a current market value exceeding $73 million.
The transaction coincided with a $65 million equity injection from executives and a $10 million convertible bond arrangement signed with DL Holdings, both of which contributed to improving the company's financial stability.
Efficiency improvements were achieved not through expansion, but by phasing out outdated and inefficient equipment and relocating operations to regions with more competitive electricity prices. Cango deployed the latest mining equipment, particularly the S21 and S21XP models, targeting high-cost areas including Paraguay and Oman. The company also implemented revenue-sharing agreements with infrastructure providers at specific locations to retain profit margins without bearing the full operational costs.
Mining Capacity and Performance Metrics
As of March 31, Cango's overall hash rate capacity reached 37.01 EH/s. Direct mining operations contributed 27.98 EH/s, while hash rate leasing agreements accounted for 9.02 EH/s.
This leasing strategy allows Cango to generate revenue in high-cost areas without incurring all operational expenses.
Management described this strategy as a “lean production model,” emphasizing sustainable profitability rather than merely pursuing maximum expansion.
The Rise of AI Strategy
Cango stated that it plans to use resources freed up by debt reduction for the development of AI computing infrastructure. Management believes that the existing power infrastructure and facilities provide a reasonable foundation for this strategic evolution.
This approach reflects a broader trend in the industry. MARA recently sold $1.1 billion worth of Bitcoin while reducing its workforce by 15%. Core Scientific is evaluating the sale of its entire BTC portfolio to finance its AI transformation. Cipher Digital has signed a 15-year infrastructure agreement with partners to pivot towards data center services.
Despite a 3.3% increase in stock price on Wednesday, CANG's stock has fallen nearly 39% over the past month and more than 80% over the last six months.
At the time of publication, Bitcoin had risen approximately 4% during trading hours, supported by news of a conditional ceasefire agreement between the U.S. and Iran.