Bitcoin miner Cango has sold 4,451 bitcoin for around $305 million to partially pay down a bitcoin-collateralized loan. The company aims to strengthen its balance sheet and reduce financial leverage by using the sale’s proceeds. Additionally, this move will enable Cango to expand into AI infrastructure, as stated in a press release. This transaction comes at a time when the bitcoin price has dropped nearly in half from its October all-time high.
Cango is not alone in exploring AI data centers; other notable companies like IREN, Core Scientific, and Riot Platforms have already ventured into this space. The similarity between bitcoin mining infrastructure and AI requirements lies in their need for cheap electricity to power computer hardware continuously.
However, it’s challenging to determine whether Cango’s recent mentions of AI are driven by business reasons or marketing efforts. This trend echoes the “blockchain” phenomenon of 2017-2018, where various companies touted blockchain technology as a solution. Some companies, like Kodak, abandoned crypto altogether in search of new profits.
The recent price decline of bitcoin has affected its value, making it challenging for miners to generate assets with their hardware and associated energy costs. Nevertheless, some startups are exploring ways to integrate machines into home heating equipment to offset the costs of climate control.
Interestingly, Cango is paying down a leveraged position on Bitcoin at a time when the price has been in a downward spiral. This sale is notable as it shows that even large companies are liquidating bitcoin reserves during market downturns. However, the impact of such events on the overall bitcoin price remains uncertain.
Source: https://gizmodo.com/major-bitcoin-miner-sells-305-million-worth-of-crypto-to-fund-pivot-to-ai-2000720078