Cango Poised to Become Bitcoin Mining Proxy for Bitmain

Cango, the Chinese automobile financing platform that recently pivoted to Bitcoin mining, is set to indirectly become a hashing proxy for Bitmain via its financing arm, Antalpha.

In a filing on Friday, Cango disclosed that it received a non-binding letter of intent from Enduring Wealth Capital Limited (EWCL), a British Virgin Islands-registered company, proposing a series of transactions to gain control of Cango.

According to the filing, EWCL has three directors: Andrea Dal Mas, Peng Yu, and Anggun Mulia Fortunata, with Dal Mas and Yu serving as key decision-makers. Public records indicate that both Dal Mas and Yu also work for Antalpha, Bitmain’s strategic partner providing financing and custody services for mining clients. Dal Mas is Antalpha’s managing partner and chief information officer, while Yu serves as chief strategy officer.

EWCL’s proposal includes acquiring 10 million Class B ordinary shares of Cango from co-founders Xiaojun Zhang and Jiayuan Lin, which carry 20 votes per share. The remaining Class B shares held by Zhang and Lin would then be converted into Class A shares with one vote per share.

As part of the deal, Zhang and Lin would exit Cango’s senior leadership, and EWCL would sell off the company’s automobile financing business to a third party, shifting its sole focus to Bitcoin mining outside of China.

Antalpha previously invested 38.06% in U.S.-listed asset management firm Metalpha in 2022. At the time, an SEC filing revealed that Antpool owns 100% of Antalpha, with 78% of Antpool controlled by Great Simplicity—a company wholly owned by Bitmain co-founder and chairman Ketuan Zhan.

EWCL’s bid to take control of Cango comes just months after Cango signed a purchase agreement with Bitmain to acquire 32 EH/s of energized hashrate operated by Bitmain. Despite holding less than $100 million in cash and $560 million in current assets as of September 30, Cango committed nearly $300 million in cash to the deal.

These connections between Antalpha, Antpool, Bitmain, EWCL, and Cango suggest that Cango may have been positioned as a mining proxy for Bitmain from the outset. This could also explain why Cango purchased on-rack Antminer S19XPs at a time when most institutional miners are upgrading to more efficient hardware.

Cango reported a Bitcoin production cost of approximately $67,700 per BTC for Q4, translating to a hashcost of $42/PH/s. Given Bitcoin’s hashprice revenue of $47/PH/s, this results in minimal gross profits. In February, Cango mined 473 BTC with a realized hashrate of 29.56 EH/s, making it the fourth-largest publicly listed Bitcoin mining firm.