Shares of bitcoin miner Cango dropped more than 21% on Tuesday after the company reported an $81.6 million second-quarter net loss as it continued scaling back its mining operations and pivoting toward AI infrastructure.
NYSC-listed Cango recorded $50.8 million in total revenue in the second quarter, down roughly 50% from the first quarter, with $47.4 million of that total coming from bitcoin mining. The rest of the business has essentially evaporated. The company said the revenue decline was mostly due to an effort to “right-size its mining operations” by phasing out older S19 mining rigs and transitioning some capacity to a hosted leasing model.
The $81.6 million net loss was largely driven by non-cash charges. Cango took $51.4 million in combined impairment and disposal losses on mining machines it retired during the quarter, including $42.9 million in impairment losses and $8.5 million in disposal losses tied to the decommissioned hardware. After stripping out those non-cash items, the underlying operational picture was less dramatic but still showed a business in active transition with declining revenue across all segments.
Smaller Fleet, Better Unit Economics
Cango’s operating hashrate came in at 27.58 EH/s as of June 30, made up of 19.94 EH/s of self-mining capacity and 7.74 EH/s of leased capacity. The company mined 656 bitcoin during the quarter and currently holds 1,065 BTC worth roughly $82.8 million.
Despite the shrinking fleet, Cango improved its cost efficiency. The average cash cost per bitcoin mined fell approximately 5% from the first quarter to around $73,313. The company has also started hedging its bitcoin exposure to give it a price volatility buffer, a move that reflects growing caution across the mining sector as bitcoin trades in the high $70,000 range after a volatile first half of 2026.
CEO Paul Yu said the company is focused on “unit economics rather than scale” in its bitcoin mining business. The strategy marks a sharp departure from peers like Riot Platforms and CleanSpark, which have continued expanding their hashrate despite pressure on mining economics. Cango’s approach prioritizes profitability per machine over total output, betting that a leaner operation will outlast competitors still chasing growth.
From Mining to AI Compute
As part of its broader pivot, Cango has been converting its Georgia mining site to support GPU computing. The facility can support up to 3 megawatts of power for AI workloads, with related revenue expected to begin rolling in during the third quarter. The move mirrors a wider trend among bitcoin miners, who are repurposing power-hungry facilities for AI inference and training work as mining margins compress across the industry.
Cango originally entered the bitcoin mining business after reinventing itself from a Chinese automotive services company. The NYSE-listed firm began mining operations in late 2024 and quickly built out a meaningful hashrate, at one point producing over 660 BTC per month. But the transition from auto finance to mining to AI infrastructure has left investors navigating a company that looks fundamentally different from quarter to quarter.
The earnings release, dated Aug. 31, initially triggered a roughly 9.6% decline in after-hours trading. The damage deepened during Tuesday’s regular session as broader market participants digested the full scope of the losses. Cango shares (CANG) were trading around $1.89 on Tuesday morning, down roughly 21% on the day.
Mining Sector Under Pressure
Cango’s results come as the broader bitcoin mining sector faces squeezed margins. The February 2026 wipeout that sent bitcoin from near $98,000 to roughly $58,000 forced many miners to reassess their strategies. Those that had expanded aggressively during the bull market found themselves holding expensive machines and high energy contracts while bitcoin’s price cratered.
Riot Platforms, one of the largest U.S. miners, reported a $28 million loss in the second quarter despite benefiting from Texas power credits. Bitfufu, another miner with AI ambitions, produced 1,250 BTC in the quarter but has also been cutting back on older hardware. The shared theme across the sector is a search for alternative revenue streams, with AI compute emerging as the most popular option.
The economics of mining have shifted considerably since the April 2024 halving cut block rewards to 3.125 BTC. Miners now depend more heavily on transaction fees and bitcoin’s price appreciation to maintain profitability. Those with older, less efficient machines have been hit hardest, as the cost of electricity per bitcoin mined rises when hashpower is less efficient and energy prices remain elevated.
For Cango, the transition to AI compute is further advanced than most. The Georgia site’s conversion to GPU hosting positions the company to capture some of the demand for AI infrastructure that has driven valuations for firms like Core Scientific and Iris Energy. But the mining business still accounts for the vast majority of revenue, and the AI pivot remains in its early stages with third quarter revenue yet to materialize.
The stock’s 21% single-day drop reflects investor skepticism about the pace of the transition and the size of the quarterly losses. At $1.89 per share, Cango trades at a fraction of its post-consolidation levels from earlier this year, when the company completed a 10-for-1 reverse stock split in July to maintain its NYSE listing. For a firm that has reinvented itself twice in two years, the next quarterly report will determine whether the AI bet can offset the mining contraction or whether Cango will need yet another reinvention to survive.
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