Cango Sets Stage For Next Growth Phase As Bitcoin Competition Heats Up
The bitcoin miner outlined plans to diversify into operation of high-performance computing centers over the mid- to long-term
Key Takeaways:
- Cango reported 1 billion yuan in revenue during the second quarter, down slightly from the first quarter, as it boosted its bitcoin mining capacity by 44% in July
- The company made its first purchase of a mining facility in August, as it seeks greater efficiencies and hones its expertise in operating high-performance computing centers
Bitcoin miner or high-performance computing (HPC) specialist?
The proper description for Cango Inc. (NYSE:CANG) seems to be constantly changing as it charts a path forward after driving away from its longtime car-trading businesses late last year. The company has been building itself up as a bitcoin miner, becoming one of the world’s top two players by the end of June after completing its installation of 18 EH/s of new capacity.
In its latest quarterly report released on Thursday, Cango revealed it’s also aiming to develop its abilities to use, host and operate HPC facilities, which refers to computing facilities with the large amounts of both processing power and also electricity needed for high-performance computing. Such facilities can be used not only for bitcoin mining, but are also expected to experience exploding demand to host highly complex applications using rapidly evolving artificial intelligence (AI).
Cango made an important move in its new HPC roadmap by acquiring its first mining facility in August, as it seeks to gain expertise in the intricacies of running such high-performance computing centers. Before that, the company exclusively used an “asset-light” strategy that saw it use third-party centers to host all of its mining operations.
At the same time, Cango’s latest results show it’s starting to feel the heat of intensifying competition among bitcoin miners as more people chase the cryptocurrency now worth more than $110,000 per unit. As that happens, Cango’s cost of revenue is fast approaching its actual revenue, driving down its profitability.
“In just nine months, we’ve established ourselves as one of the largest bitcoin miners globally, supported by our asset-light strategy …
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