The world of Bitcoin mining is undergoing rapid transformation. With record-breaking prices attracting a flood of new entrants, the industry has become increasingly competitive—driving up operational costs and reducing per-unit profitability. Yet, despite these headwinds, companies like Cango Inc. are doubling down on their mining operations, betting big on long-term value appreciation rather than short-term gains.
Cango, once known primarily for auto financing and trading, made a bold pivot into Bitcoin mining in November 2024. Since then, it has mined 2,944.8 bitcoins—and hasn’t sold a single one. This “mine and hold” strategy reflects growing confidence among institutional players in Bitcoin’s long-term potential, even as market volatility and rising production costs challenge profitability.
The Rising Cost of Staying Competitive
Bitcoin mining has evolved from a niche tech experiment into a global, capital-intensive arms race. As more miners join the network, the total computational power—known as the hashrate—increases. This directly impacts how much Bitcoin individual operators can mine, due to the protocol’s difficulty adjustment mechanism.
For Cango, this reality is clear: daily output has declined from 18.4 BTC per day in December to 15.7 BTC per day in April, despite maintaining a stable 32 EH/s of mining capacity. The reason? More competition means smaller rewards for the same amount of work.
This shrinking yield has pushed up Cango’s cost per Bitcoin mined (excluding depreciation) to $70,602** in Q1 2025—up from $67,770 in Q4 2024. While still well below the industry average of around $94,000 per BTC, this figure highlights a critical trend: diminishing returns are the new normal**.
Still, Cango remains more efficient than many peers thanks to its agile, asset-light model. By renting space in third-party data centers across four continents, the company avoids the massive upfront costs of building and maintaining its own facilities. However, this flexibility comes at a price—particularly in electricity, where owned facilities often secure cheaper rates.
Scaling Up to Stay Ahead
To counter falling yields, Cango is aggressively expanding. The company plans to install an additional 18 EH/s of mining capacity by July 2025, bringing its total to 50 EH/s—a move that would position it as the second-largest independent Bitcoin miner globally.
This expansion isn’t just about size—it’s about efficiency and resilience. By spreading operations across geographies, Cango mitigates risks related to regulatory changes, power outages, and geopolitical instability.
Current Mining Footprint (by Capacity):
- United States: 38%
- East Africa: 37%
- Oman: 15%
- Paraguay: 9%
- Canada: 1%
This diversified footprint allows Cango to optimize performance based on local energy costs, climate conditions, and regulatory environments. For instance, cooler climates reduce cooling costs for hardware, while regions with surplus renewable energy offer cheaper, sustainable power options.
Financial Performance Amid Volatility
Bitcoin’s price swing in early 2025 tested Cango’s resolve. After peaking above $100,000**, BTC dropped to around **$76,000 in March before rebounding. While Cango held firm—refusing to sell any of its mined coins—the market dip impacted its financials.
In Q1 2025:
- Operating loss: 155.5 million yuan ($21.6M), compared to a 74.2M profit a year earlier
- Net loss: 207.4 million yuan, reversing a 90M profit from Q1 2024
- Adjusted EBITDA: Fell to 27.6M yuan from 108.4M year-over-year
These losses were largely driven by unrealized mark-to-market losses on its Bitcoin holdings—not cash outflows. In fact, Cango’s balance sheet strengthened significantly: cash and short-term investments surged to 7.7 billion yuan by March 31, up from 2.5 billion just three months prior.
This liquidity boost came from the appreciation of its growing Bitcoin reserves—a powerful signal that “HODLing” can strengthen financial positioning even during downturns.
Mine and Hold: A Strategic Bet on the Future
Cango’s CEO Lin Jiayuan emphasized the company’s long-term vision:
"Given our strong confidence in Bitcoin's long-term value appreciation potential, we have adopted a ‘Mine and Hold’ strategy, prioritizing both self-mining and long-term holding."
This approach mirrors broader trends among institutional miners who view Bitcoin not as a tradable commodity but as a digital treasury asset—similar to gold reserves for central banks.
By reinvesting revenue into capacity growth and holding mined coins, Cango aims to compound value over time. The strategy also opens doors for future financing options, such as using Bitcoin as collateral for low-interest loans.
👉 Learn how top-tier mining firms are using strategic holding models to maximize long-term returns.
Revenue Growth Signals Strong Transition
Despite mining challenges, Cango’s financial transition has been remarkable:
- Q1 2025 revenue: 1.1 billion yuan, nearly double Q4 2024’s 668 million
- Over 1,541 BTC mined in Q1 alone
- Nearly 1 billion yuan of revenue came directly from mining
Meanwhile, the company continues winding down its legacy auto businesses. Its car export platform, AutoCango, has attracted over 2.37 million website visits, serves 290,000 users, and lists more than 480,000 used cars—but is being divested as part of a strategic shift toward digital assets.
Frequently Asked Questions (FAQ)
Q: Is Bitcoin mining still profitable in 2025?
A: Yes—but profitability depends heavily on efficiency, energy costs, and scale. Miners with access to low-cost power and modern hardware remain competitive, though rising hashrate and difficulty are squeezing margins.
Q: Why isn’t Cango selling its mined Bitcoin?
A: Cango follows a “mine and hold” strategy, reflecting strong confidence in Bitcoin’s long-term value. By holding rather than selling, it avoids realizing losses during volatility and builds a growing reserve of digital assets.
Q: How does increasing competition affect Bitcoin mining output?
A: As more miners join the network, the total hashrate increases, leading to higher mining difficulty. This means each miner earns fewer BTC for the same computational effort unless they scale up capacity.
Q: What is an asset-light mining model?
A: It involves renting space in third-party data centers instead of building owned facilities. This reduces upfront costs and increases flexibility but may lead to higher ongoing expenses like electricity.
Q: Where is Cango expanding its mining operations?
A: Cango operates across four continents, with major hubs in the U.S. (38%) and East Africa (37%), followed by Oman (15%), Paraguay (9%), and Canada (1%). New capacity details haven’t been disclosed yet.
Q: Can small miners compete with large players like Cango?
A: It’s increasingly difficult. Economies of scale, access to capital, and geographic diversification give large miners significant advantages. Most small operators now join mining pools to remain viable.
With expansion underway and a disciplined financial strategy in place, Cango exemplifies how modern miners are adapting to a hyper-competitive landscape. While rising costs and falling per-unit yields pose real challenges, strategic scaling and long-term holding can still generate substantial value.
As the Bitcoin network grows stronger and more decentralized, companies that focus on sustainable operations—and resist the urge to panic-sell during volatility—may be best positioned to thrive in the next era of digital asset mining.