Located in the eastern Himalayas, Bhutan, a country better known for prioritising Gross National Happiness, has quietly risen to become an important player in the crypto world with a remarkable troupe of Bitcoins, the gold among virtual assets.
Recently, blockchain analytics firm Arkham Intelligence revealed that Bhutan ranks fourth globally in terms of government Bitcoin reserves, possessing an impressive 13,000 BTC, valued at approximately $750 million.
This significant achievement highlights a unique narrative that unlike many governments that buy Bitcoin or take it from others, Bhutan gets all its Bitcoin from mining it itself.
Bhutan's strategy in cryptocurrency differs from other nations. Countries like El Salvador and the United States have gained contempt for their Bitcoin holdings which are often obtained through market purchases or law enforcement asset seizures.
In contrast, Bhutan's Bitcoin reserves are a direct result of its enormous hydropower resources, allowing for eco-friendly mining operations. The Kingdom began its mining journey in 2019, transforming a former Education City project into one of Bhutan's largest Bitcoin mining facilities.
Despite prioritizing Gross National Happiness over economic growth, Bhutan's decision to embrace digital innovation signifies a strategic move towards integrating technology into its economy.
Currently, Bhutan generates between 55 BTC (approximately $3.6 million) and 75 BTC (around $4.9 million) every week from its mining operations. This not only diversifies its revenue streams but also stabilizes its economy from global fluctuations. Bhutan's
Bitcoin holdings represent nearly 25% of its projected GDP, estimated to exceed $3 billion by the end of 2024.
Arkham Intelligence played an important role in revealing Bhutan's Bitcoin holdings by blockchain analytics, they revealed that Bhutan's reserves are derived completely from mining activities, categorising them from the Bitcoin reserves of other nations. Using time lapse satellite imagery, Arkham verified the timeline of Bhutan's on-chain mining activities, which is providing a complete view of how its reserves have grown over the time.
Bhutan's state investment wing, Druk Holding & Investments (DHI), oversees a diversified crypto portfolio that includes Ethereum, BNB, Polygon, and Tether, which shows Bhutan is into a fully integrated approach to cryptocurrency investment and mining.
DHI has been active in crypto since at least February 2021, by receiving its first Bitcoin, 0.0267 BTC (valued around $1,280 at the time).
Druk is regularly transferring Bitcoin to exchanges, making deposits at least once a month. Since June, it has sent a total of 1,358.64 BTC, worth nearly $90 million, which is 318 BTC (about $21 million) more than what it mined during that time. Overall, Bhutan holds 13,119 BTC, valued at $860.4 million, which is just under half of its total Bitcoin holdings.
The Royal Government of Bhutan's entry into the cryptocurrency mining period has caught the attention of global players in the Crypto . DHI’s collaboration with Bitdeer, a Singapore-based mining firm, established the carbon-neutral Bitcoin mining operation. This partnership aims to possess Bhutan's mining capacity and plans to expand from 100-megawatt to 600 megawatts by the end of 2025.
Currently, DHI manages daily block rewards of 1 to 5 BTC, This strategic investment in mining facilities not only elevates Bhutan's status in the cryptocurrency market but also enhances its commitment to potential practices.
The Kingdom’s 100% carbon-free Bitcoin mining operation sets a benchmark for other nations who are in plan to seek balance both the technological and environmental responsibility.
While Bhutan's efforts in cryptocurrency are remarkable, there are still challenges. Earlier this year, there were issues raising about DHI's dealings with bankrupt crypto lenders like BlockFi and Celsius, which raised questions about possible losses from risky trading. However, DHI assured that no money was lost and that their Bitcoin mining started when Bitcoin was priced at around $5,000.
Between 2021 and 2022, Bhutan also sent and received over $817 million in cryptocurrency including Bitcoin, Tether, USDC, Chainlink, and Ethereum to and from lending platforms BlockFi, Celsius, and Hodlnaut, that all of these lenders have gone bankrupt.
Despite this challenging situation, Bhutan's careful management of its assets has helped protect its economy from major problems like bankruptcy. Bhutan's focus on responsible asset management has protected its economy from major repercussions.
The COVID-19 pandemic has highlighted the vulnerability of Bhutan's traditional industries, particularly tourism, stressing the urgent need for economic diversification in the country. By embracing cryptocurrency mining, Bhutan aims to reduce the impact of global economic fluctuations and endorsed a digitally advanced economic future
Bhutan's rise in the cryptocurrency sector coincides with growing global interest in digital assets. While countries like the UK and the US hold major Bitcoin reserves 61,245 BTC and 203,239 BTC, respectively, Bhutan has reportedly sent 16,897 BTC to exchanges over the years, worth $1.1 billion now but $578.5 million at the time of transfers. Ethereum, with over 92.53 ETH mined prior to the network's shift to proof-of-stake in September 2022.
Conclusion
As Bhutan continues to expand its mining operations and explore new digital opportunities, its commitment to sustainability and eco-friendly practices serves as a beacon for countries aiming to harness cutting-edge technologies for economic advancement.
This unique narrative of a small Himalayan Kingdom stands testament to the transformative power of cryptocurrency, illustrating how even the smallest players can make substantial impacts on the global stage
