"Digital Wealth" Small South Asian Country - Bitcoin Power

 Author: Hameiz; Source: Hameiz Digital Square

The Kingdom of Bhutan, a small country in South Asia with a land area of ​​38,400 square kilometers and a population of only 885,000, is a major Bitcoin holder despite its backward economy, and is expected to become a big winner in the digital economy era.

(I)

According to blockchain analysis company Arkham Intelligence, the Kingdom of Bhutan is the fourth country in the world with the largest government holding of Bitcoin, with 13,036 BTC and a current market value of US$750 million.

According to Arkham data, the Bitcoin reserves managed by Druk Holding & Investments (DHI), the national investment institution of this Himalayan kingdom adjacent to major countries such as China and India, are twice as high as those of the famous El Salvador, which holds 5,876 BTC worth US$353 million.

The Kingdom of Bhutan’s Bitcoin reserves are the result of Bitcoin mining operations since 2019. The country is rich in hydropower resources, and the power industry is one of the pillars of the country’s economy, accounting for nearly 20% of GDP.

While Bhutan has been involved in cryptocurrency mining for some time, new data from Arkham Intelligence reveals the true scale of its operations.

Unlike other countries that usually obtain Bitcoin through forfeiture, Bhutan’s crypto wealth comes directly from its Green Power mining farms, including one of the largest BTC mining facilities built on the site of the former Education City project.

In addition to Bitcoin, Arkham’s data shows that DHI also holds 656.013 ETH, as well as small amounts of BNB, MATIC, USDT and other cryptocurrencies.

(II)

In April 2023, Forbes published an article about Bhutan’s involvement in cryptocurrency investment, which revealed that DHI had conducted millions of dollars in transactions with the bankrupt cryptocurrency lending platforms BlockFi and Celsius.

The bankruptcy filings of these platforms revealed that Bhutan was involved in digital assets through the state investment agency DHI, sparking speculation and doubts about whether Bhutan had lost a lot of money through speculative trading.

According to local news reports, DHI later clarified that Bhutan had borrowed some digital assets for certain investments, but all the money had been repaid and no money was lost.

At the same time, DHI also disclosed information that its Bitcoin mining operations had been ongoing since April 2019, when the price of Bitcoin was about $5,000. Objectively speaking, Bhutan generates a lot of cheap green energy through river hydropower, while the country's high passes or mountains provide perfect natural air-conditioned places for BTC mining.

In 2023, Bhutan established a strategic partnership with Bitdeer to further enhance its BTC mining ambitions. It is reported that Bitdeer is a mining company led by former Bitmain Technology CEO Jihan Wu. The partnership is expected to expand Bhutan's mining capacity and raise $500 million through a closed-end fund.

In June 2024, veteran Wall Street investment bank Cantor Fitzgerald said that although it is undervalued compared to other mining companies, Bitdeer is expected to become one of the largest listed mining companies by the end of the year.

(III)

In response to domestic and international concerns and even doubts, DHI has made public statements to elaborate on its goals and strategies as the national investment institution of the Kingdom of Bhutan.

DHI claims that its only goal is to improve the lives of the Bhutanese people and create a secure future for future generations. To this end, a team of investment experts manages a diversified investment portfolio, holding assets in various local and global asset classes and investment themes.

"Our portfolio contains a range of investments across asset classes, including global equities, fixed income and venture capital in promising startups; domestic and foreign real estate; renewable energy including hydropower; health technology, biotechnology, life sciences and agricultural technology; and digital asset mining and investment."

DHI also emphasized that the focus on technology is not only for digital assets, but to invest in the entire technology field to promote economic growth and improve the lives of ordinary Bhutanese. Its future-oriented investment strategy is helping to build a more connected and sustainable Bhutan by deepening local knowledge and participating in the rapidly developing technology landscape.

"We are developing relevant human capital for the industries of the future, ensuring our citizens are equipped to participate in the global economy from within Bhutan. For example, DHI's investment in the world's first self-sovereign national digital identity platform, which was designed and built locally, represents an important step in the country's ongoing digital transformation. These investments will ensure Bhutan is at the forefront of global innovation."