Chinese car trading platform Cango sold some of its crypto assets in a significant transaction in March. According to the company’s announcement, a total of 2,000 Bitcoins were sold during March.
All proceeds generated will be used to repay Bitcoin-backed loans, and the move is said to be aimed at reducing the company’s debt burden.
Cango’s move is seen as an example of how companies are using crypto assets as a financial management tool these days. The company has previously ventured into cryptocurrency mining and entered this field by purchasing Bitcoin mining equipment manufactured by Bitmain.
As of March 31, the company had a total of $30.6 million in outstanding Bitcoin-backed loans, according to the statement. This figure shows that debt has decreased significantly since the sale.
On the other hand, Cango is stated to still have a large amount of Bitcoin on its balance sheet. The company currently owns 1,025.69 BTC. This shows that the company has not completely turned its back on crypto assets, but is aiming to establish a more balanced financial structure.
Experts view Cango’s decision as a prudent move from a risk management perspective, but point out that it could lead to more companies using crypto assets for debt restructuring.
*This is not investment advice.