Bhutan has emerged as a significant player in the cryptocurrency market, overtaking El Salvador as the largest Bitcoin holder in South Asia.
According to Arkham Intelligence, Bhutan now holds 13,029 Bitcoin, valued at approximately $758 million.
The Kingdom of Bhutan’s ascension in the crypto world is largely attributed to its strategic use of hydroelectric power for Bitcoin mining.
This has allowed Bhutan to capitalise on its abundant natural resources, with the holdings being managed by the country’s investment arm, Druk Holdings and Investments (DHI).
On September 16, Arkham Intelligence disclosed that Bhutan's substantial Bitcoin reserves make it the largest holder in the region, surpassing El Salvador, which currently holds 5,875 Bitcoin worth $331 million. The revelation highlights Bhutan’s growing influence in the cryptocurrency space.
Druk Holdings and Investments, which oversees Bhutan’s Bitcoin portfolio, has been actively mining Bitcoin since April 2019.
At that time, Bitcoin was valued around $5,000. The mining operations, confirmed through a mix of on-chain data and satellite imagery, are located at the site of Bhutan’s former Education City project.
This former government initiative, aimed at creating an international educational hub, was abandoned amid scandals and mismanagement.
Bhutan's Bitcoin holdings are complemented by a diversified crypto portfolio. Druk Holdings also holds 656 ETH, valued at approximately $1.5 million, along with smaller amounts of BNB and Polygon.
The scale of Bhutan’s Bitcoin holdings is particularly notable given the country’s economic context. With its gross domestic product (GDP) projected to reach $3 billion by the end of 2024, Bhutan’s Bitcoin reserves represent roughly a quarter of its GDP.
In May 2023, Druk Holdings partnered with Bitdeer to expand its mining operations.
The collaboration aims to boost Bhutan’s mining capacity to 600 megawatts by mid-2025, further enhancing the country's role in the global crypto market.
El Salvador, which began acquiring Bitcoin in September 2021 when prices were around $51,700, has focused on utilising geothermal energy from volcanoes for its mining activities. Despite these efforts, El Salvador trails Bhutan in terms of overall Bitcoin holdings.
The largest Bitcoin mining facility in Bhutan is situated on the abandoned Education City site, a project initially valued at $1 billion. Historical satellite imagery indicates construction of the mining facility began in December 2021.
The facility, camouflaged by mountainous terrain, is marked by visible transformers and power lines.
The Bhutanese government, including the Ministry of Finance, has remained discreet about its cryptocurrency ventures.
Druk Holdings, which also manages Bhutan’s flagship airline, hydroelectric power plants, and a cheese factory, has not disclosed specific details about revenues or investment in Bitcoin mining.
Bhutan’s foray into Bitcoin mining was driven by economic challenges exacerbated by the COVID-19 pandemic.
Since 2020, Bhutanese officials have been engaging with Bitcoin miners and suppliers, resulting in a notable surge in power usage by the mining industry and a significant increase in imports of mining chips in 2022.
Additionally, Bhutan’s collaboration with Singaporean Bitcoin mining giant Bitdeer for a 600 megawatt facility in Gedu suggests that the country’s mining operations may extend beyond the known state-owned sites.
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