Bhutan's Bitcoin Holdings Reach $750 Million Through Strategic Mining
Bhutan, a small Himalayan kingdom with a population of less than 800,000, has quietly built up Bitcoin holdings worth $750 million according to Forbes. The holdings represent approximately 27.9% of Bhutan's estimated 2023 Gross Domestic Product of $2.686 billion.
The country's venture into Bitcoin mining began in April 2019, as confirmed by Druk Holding & Investments, Bhutan's sovereign investment arm. The kingdom leveraged its abundant hydroelectric resources to power mining operations. Bhutan's rivers, fed by Himalayan glaciers, provide 23,760 MW of technically feasible hydropower potential, accounting for 30% of the country's GDP.
Bhutan's decision to enter the cryptocurrency market was driven by economic necessity, as the country faced declining tourism revenues. The COVID-19 pandemic, which severely impacted Bhutan's $88.6 million annual tourism revenue, further validated this strategic move. Bitcoin mining offered a way to monetize Bhutan's energy surplus and secure a new revenue stream.
In 2022, Bhutan's commitment to cryptocurrency mining became evident through significant hardware investments. Customs data revealed that the country imported $142 million worth of computer chips, accounting for approximately 10% of Bhutan's total $1.4 billion inbound trade. These chips were primarily sourced from China and Hong Kong.
On April 5, 2024, Druk Holding & Investments and Bitdeer announced plans to increase Bhutan's mining capacity sixfold, reaching 600 MW by the first half of 2025. This upgrade aims to offset the potential impact of the upcoming Bitcoin halving event. Bitdeer's chief business officer stated that the planned upgrades would raise Bhutan's mining capacity by 500 MW, building upon the existing 100 MW facility in Gedu.
As of September 2024, Bhutan's Bitcoin holdings have made it the fourth-largest government holder on Arkham's platform. While this represents a new revenue stream for the country, risks remain. The volatile crypto market could impact the value of Bhutan's holdings, and energy-intensive mining may strain the country's electricity grid. The Asian Development Bank forecasts Bhutan's economic growth will slow to 4.6%, underscoring the need for careful management of these digital assets.
