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Cryptocurrency News Articles
Bhutan, the Small Himalayan Country That Became the Fourth Largest Holder of Bitcoin
Sep 20, 2024 at 11:23 am
The country has overtaken El Salvador in Bitcoin ownership, holding the assets over two times more in quantity.
Bhutan, a landlocked country nestled in the Himalayas, has quietly emerged as a major player in the world of cryptocurrency, ranking fourth among nations with the highest Bitcoin (BTC) holdings.
This revelation came to light thanks to an X post by Arkham Intelligence, a public data application that empowers users to analyze blockchain and crypto activity. The post provides a glimpse into Bhutan’s crypto holdings, revealing a substantial amount of Bitcoin and a smaller presence of other assets like Ethereum (ETH), Binance Coin (BNB), and Polygon (MATIC).
According to the X post, the small Himalayan country holds over 13,000 Bitcoins, valued at a total of more than US$780 million, based on an average price of nearly US$60K each. In addition to Bitcoin, Bhutan also has holdings in ETH, BNB, and MATIC, though these assets collectively amount to a mere US$40 in value.
However, another report suggests a notable movement towards Ethereum as well. The movement is not from Bhutan’s national authorities but from its user population. Wallets tied to the Himalayan kingdom held 656.013 Ethereum (ETH), worth approximately $1.5 million.
Bhutan’s Bitcoin holdings, which constitute nearly 28% of its estimated 2023 GDP of US$2.7 billion, have sparked much curiosity. Earlier, El Salvador gained a reputation for holding Bitcoins as part of its national economy. However, Bhutan has surpassed El Salvador by holding more than twice the value of El Salvador’s, which stands at US$335 million.
If we compare the per capita holdings of these two countries, Bhutan is ahead of El Salvador by a significant margin since Bhutan’s population is only 12% of El Salvador’s population.
Bhutan’s crypto holdings are not an overnight phenomenon. The country has been gradually and silently building this stock over at least five years.
According to reports, the country’s foray into the crypto space began in April 2019, when the digital asset was valued at US$5,000—much less than what it is valued today. The onset of the pandemic saw the strategy and operations spread their wings further. Disclosures on major investments and information started coming in between 2022 and 2023. Currently, as suggested by reports, the country is in an expansion mode, expanding its mining capacity.
What makes Bhutan stand out from the rest of the national economies that hold Bitcoin is its involvement in mining. In the next segment, we look into the process of Bitcoin generation.
The Kingdom of Bhutan has abundant hydroelectric resources. Its rivers, fed by Himalayan glaciers, adequately support this power generation potential. It is technically feasible for the small kingdom to generate 23,760 MW of power, which could power as many as over 17 million average American homes, equivalent to supplying the energy needs of a city like New York twice over. The generation of hydropower accounts for 30% of Bhutan’s GDP.
Bitcoin mining operations require a robust power supply. Studies suggest that Bitcoin’s annual energy consumption needs fall between the range of 91 and 150 terawatt-hours since it involves a complex and energy-intensive Proof of Work mining process. According to an ESG study, more than 23% of all Bitcoin miners use hydropower to run their setups.
Bhutan recognized a match between demand and supply here. It realized that its supply of abundant green energy could mean powering large-scale Bitcoin mining operations without compromising the local environment or sustainability goals.
With the onset of the pandemic, the country also suffered from declining tourism revenues, which constituted a large part of Bhutan’s GDP. According to journalists Iain Martin and Sarah Emerson, who were closely following the development, Bhutan, at this crucial juncture, realized that it could diversify its revenue stream by monetizing Bhutan’s surplus energy for Bitcoin mining.
DHI works with the purpose of safeguarding and enhancing national wealth for all generations of Bhutanese through prudent investments.
The company’s current holdings of 24+ portfolio companies span a diverse range of industries, from energy, telecommunications, banking, and aviation to natural resources, pharmaceuticals, and investments abroad. It is also engaged in mining digital assets within Bhutan.
While entering the crypto assets space more than five years ago, the company borrowed some digital assets as a loan from BlockFi and Celsius, which later went bankrupt. According to DHI CEO Ujjwal Deep, the company did not lose any money in the borrowing, and everything was paid back and settled with no dues.
However, once this news dropped in the public domain, reports came out of DHI striking a collaboration with Singaporean bitcoin mining giant Bitdeer wherein the two entities revealed plans for a $500 million “green crypto mining” fund aimed at leveraging Bhutan's renewable energy resources for blockchain
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