The bitcoin miner took a series of major write-offs last year, many in the fourth quarter, and received some major new investment to shore up its finances heading into a new chapter

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Key Takeaways:

  • Cango recorded a $622 million loss last year, much of that from write-downs and other charges, but remained EBITDA positive for the period
  • The company has validated and is now preparing to scale up a new business that converts idle bitcoin mining space to use for high-performance AI computing

When the history books are written, the end of 2025 and beginning of 2026 are likely to be remembered as a pivotal time for Cango Inc. (NYSE:CANG). If current trends continue, history will show that's when the company began to sharply scale back its year-old bitcoin mining business and race full throttle into a newer, more stable business providing high-performance computing (HPC) services for AI companies.

That newer business has taken some key steps forward lately, including the establishment of a U.S.-based subsidiary led by an industry veteran experienced in the type of distributed computing that will become Cango's new focus. The company said it has also validated a "plug-and-play" model that allows for quick conversion of former bitcoin mining space into capacity usable for HPC clients, many of those smaller businesses running AI applications.

Cango discussed such a move as early as the middle of last year, back when bitcoin was still trading near record highs. But back then it portrayed the shift as more gradual, with bitcoin mining and HPC services serving as the company's dual engines.

Fast forward to the present, when Cango's latest quarterly report for the fourth quarter of 2025 shows the transformation has taken on sudden urgency, as the company shores up its balance sheet to prepare for its new chapter. That financial cleanup became necessary following a plunge that saw Cango's bitcoin holdings lose half of their value in a matter of months, as the cryptocurrency tumbled from a record high of about $124,000 last October to a trough of about $63,000 in February.

Cango revealed the extent of its internal cash-crunch in its latest report, and detailed steps it took to strengthen its balance sheet – most notably by selling down more than half of its bitcoin holdings in February and continuing to sell more after that.

"To support the next stage of Cango's strategic transformation from pure-play bitcoin mining to global AI and high-performance computing infrastructure, the company has updated its bitcoin treasury policy to focus on optimizing liquidity, capital efficiency, and long-term shareholder value," the company said in its monthly bitcoin mining results for February released last week. "Consistent with this framework, Cango intends to utilize liquidity from its bitcoin treasury for operational expenses and select strategic initiatives."

Bitcoin prices have rebounded a bit in the last few weeks, with the cryptocurrency now trading at around $75,000. But even at that level, the cost of mining an individual bitcoin for Cango – which spent more than $100,000 on an all-in basis for each coin it mined during the fourth quarter – still far exceeds the currency's latest value.

The latest comments by company executives make it clear that Cango intends to downplay the bitcoin mining business going forward and focus on developing its young HPC business. It plans to do that initially using an asset-light model taking advantage of space at third-party cryptocurrency farms around the world. Such facilities already contain key infrastructure needed for high-performance computing, including electricity sources for power-hungry computers needed to mine bitcoins and also run a new generation of AI applications.

Bolstering its balance sheet

The start of this year was a critical time for Cango, as the value of its core bitcoin holdings that are its main asset rapidly evaporated. Rather than sit back and wait to see where the market might go, the company moved quickly and sold 4,451 bitcoins over Feb. 6-7, representing more than half of the 7,474.6 in its treasury at the end of January. The company's latest monthly report showed it had just 3,313.4 bitcoins in its treasury at the end of February – including 454.83 mined during the month – indicating it was continuing to sell down its holdings.

It has used funds raised from the sales, including $305 million raised over Feb. 7-8, to pay down its long-term debt, which stood at $557.6 million at the end of last year, but is now presumably at less than half that level. The company also took multiple charges in the fourth quarter related to its bitcoin business, including impairment losses on its mining machines and changes in the fair value of receivables for bitcoin collateral. Additionally, it booked a major loss during the year related to its original car-trading business, which it sold last May to focus on its newer business lines.

All that resulted in a $622 million loss for the company last year, though it remained positive on an earnings before interest, taxes, depreciation and amortization (EBITDA) basis, which is a better indicator of cash flow. The write-downs and other efforts to shore up its finances also reduced Cango's cash and short-term investments to $41.2 million at the end of last year from $130 million a year earlier.

"Recognizing further price pressure heading into 2026, we took prudent action," said CEO Yu Peng. "We reduced debt exposure, recovered liquidity, and began phasing out inefficient capacity. These steps have strengthened our balance sheet and enhanced operational efficiency as we enter the new year."

Cango also got some help from its major stakeholders last month, when its chairman and another one of its directors agreed to collectively invest a fresh $65 million in the company, and its largest investor agreed to provide an additional $10.5 million.

The company reported fourth-quarter revenue of $179.5 million, bringing its total revenue for the year to $688.1 million, the vast majority of that from its bitcoin mining business. But notably, its fourth-quarter revenue was down about 20% quarter-on-quarter, as the company began to idle capacity due to falling bitcoin prices. Cango also detailed steps it's taking to reduce its operational costs to save money for its next chapter.

Its deleveraging has given Cango more breathing room to make the necessary investments for its longer-term plan to ramp up its HPC business. In that direction, it set up a new wholly owned subsidiary, EcoHash, earlier this year to spearhead its HPC development. And it hired Jack Jin, a former senior operations executive at online meeting giant Zoom Communications, to lead the unit's technical development.

"Leveraging our accumulated experience in large-scale deployment and management of distributed computing infrastructure, as well as our broadly partnered global energy network of bitcoin mining sites, we will launch standardized, modular AI computing nodes, aiming to provide highly flexible and cost-effective solutions for long-tail AI inference demand," said Yu.

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Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.