Bhutan, which is located in South Asia and has a population of approximately 800 thousand, recently attracted attention with its unprecedented state-level Bitcoin operation in the cryptocurrency world. The hydroelectric-supported mining activity, carried out through the country’s sovereign wealth fund, Druk Holding and Investments, showed how quickly a small country could adapt to new generation technologies.
Bitcoin decreased in state coffers
Bhutan transferred 319.7 Bitcoins this week, achieving a transaction volume of approximately $22.7 million. While 250 of the transferred tokens were sent to a wallet previously used for fund sales, 69.7 Bitcoins were moved to a new address recorded for the first time.
It was known that there were approximately 13 thousand Bitcoins in the country in October 2024. Today, the amount of Bitcoin remaining in Bhutan’s possession has decreased to 3,954 and the total value of these crypto assets is approximately 280.6 million dollars. In other words, the amount of Bitcoin in hand decreased by 70 percent in 18 months.
Since the beginning of the year, a total of $215.7 million worth of Bitcoin has outflowed from wallets controlled by Bhutan. $162.6 million of this amount was directed to addresses whose organization is unknown.
In addition to these sales, the country’s mining operation also raises questions. Because, according to available data, Bhutan’s last major input from Bitcoin mining occurred at the beginning of 2023.
Bhutan sells as market reverses
While institutional and large investors in the crypto market are moving towards buying, Bhutan’s sales attract attention. Last week, the Strategy firm acquired 4,871 Bitcoins in just five days, bringing its total holdings to 766,970 coins. Spot ETFs traded in the USA added approximately 50 thousand Bitcoins to their portfolios in March. The Ethereum Foundation staked $93 million worth of ether on the chain in a short time, taking its position instead of selling it.
Even gold-backed sovereign funds around the world increased their holdings during Iran tensions. However, states other than Bhutan either accumulate Bitcoin or maintain their current positions.
It remains unclear whether Bhutan continues mining. It’s been more than a year since the last inflow of over $100,000 into the country’s Bitcoin wallets, according to Arkham Intelligence data.
Druk Holding and Investments did not make any statement to the public or press on the issue. The questions posed remained unanswered.
It appears that Druk Holdings officials did not respond to questions about recent transfers or the fate of the mining operation.
Bhutan’s mining model was initiated thanks to the water resources-based system providing cheap energy for electricity generation. However, today, with the price of Bitcoin hovering around $71,000, the network difficulty has reached its highest level in history. The block reward drop to 3,125 Bitcoins also severely reduced the profitability of small-scale state mining.
Bitcoin mining, which is powered by energy from hydroelectric sources, may have lost its former appeal, leaving less revenue from electricity exports now providing the country’s economy. The fact that mining devices lose value faster with each increase in difficulty seems to have been a determining factor in this choice.
In the latest situation, the remaining 3,954 Bitcoins in Bhutan’s possession have fallen below even the single-week purchase volume of a US company. The superiority in cryptocurrencies mined from the mountains has once again passed to institutional investors.
