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Key Takeaways:
Bhutan’s Significant Bitcoin Holdings: According to Arkham Intelligence, Bhutan holds approximately 13,029 BTC, double the amount held by El Salvador. These holdings, worth around $758 million, have only recently been revealed despite Bhutan quietly accumulating Bitcoin through its mining operations.
Mining Operations Since 2019: Bhutan’s investment arm, Druk Holdings (DHI), has been mining Bitcoin using the country’s abundant hydroelectric power since April 2019, when the price of Bitcoin was about $5,000. This strategic move allowed Bhutan to accumulate substantial Bitcoin at lower prices.
Sovereign Involvement in Cryptocurrency: Bhutan’s growing Bitcoin reserves highlight the increasing interest of sovereign nations in cryptocurrency. While El Salvador has openly embraced Bitcoin, Bhutan has taken a more discreet approach, focusing on investment rather than integrating Bitcoin into its national currency system.
In a surprising revelation, data analytics firm Arkham has disclosed that Bhutan, the tiny Himalayan kingdom known for prioritising Gross National Happiness, holds double the amount of Bitcoin (BTC) compared to El Salvador.
Overview
In September 2024, the on-chain analytics firm Arkham Intelligence revealed a collection of addresses holding 13,029 BTC (valued at approximately $758 million), stating it was the first to disclose Bhutan’s BTC assets publicly. Arkham cited that these holdings result from BTC mining activities conducted by e Druk Holding & Investments (DHI), the investment arm of the Kingdom of Bhutan. This discovery underscores the growing interest of sovereign nations in BTC as a store of value and highlights Bhutan’s previously under-the-radar involvement in cryptocurrency markets.
Bhutan’s Quiet Bitcoin Accumulation
While El Salvador has been vocal about its BTC investments, becoming the first country in the world to adopt BTC as legal tender in September 2021, Bhutan has quietly amassed a significant digital currency holding. According to Arkham, Bhutan’s BTC reserves stand at approximately 13,000 BTC, compared to El Salvador’s 6,500 BTC. The Bhutanese government’s crypto investments had remained largely unknown to the global financial community until Arkham’s discovery. Bhutan’s involvement in BTC is all the more striking, given the country’s traditional emphasis on sustainable development, cultural preservation, and well-being over material wealth.
For years, Bhutan has been known for its focus on Gross National Happiness (GNH) rather than Gross Domestic Product (GDP). This philosophical approach has kept the nation relatively detached from the global financial system, making its sizable BTC holdings an unexpected development. This new information raises questions about Bhutan’s future financial strategy and how smaller nations are engaging with the rapidly evolving crypto landscape. Bhutan’s investment in BTC represents a calculated risk that could provide significant financial returns or expose the country to the notorious volatility of cryptocurrency markets.
Sovereign Investment Strategy: Bhutan vs El Salvador
El Salvador’s adoption of BTC as legal tender has been highly publicised, with President Nayib Bukele positioning the country as a global crypto pioneer. The Salvadoran government has promoted BTC to attract foreign investment, enhance financial inclusion, and reduce reliance on the US dollar. However, its BTC strategy has not been without challenges, as the country’s BTC holdings have seen sharp value fluctuations. The decision to make BTC legal tender also sparked concerns from international institutions such as the International Monetary Fund (IMF), which warned of financial instability risks. On the other hand, Bhutan has taken a more conservative approach to its BTC investments, keeping its holdings secret until now. The Bhutanese government has reportedly built its BTC reserves through the DHI for years, strategically buying during market dips.
In early 2023, Bhutanese officials confirmed that the country began BTC mining in April 2019, utilising hydroelectric power. At the time, BTC was priced at approximately $5,000. This accumulation strategy suggests that Bhutan views BTC as a hedge against inflation and a long-term investment asset. Unlike El Salvador, Bhutan still needs to integrate BTC into its national currency and domestic financial policies. Instead, Bhutan views BTC as an investment rather than a tool for immediate economic transformation. By maintaining a low profile and quietly growing its reserves, Bhutan may be trying to shield itself from some of the political and financial scrutiny that El Salvador has faced. However, the revelation of Bhutan’s BTC holdings could signal that the country is preparing to play a more active role in global crypto markets. Whether Bhutan will follow in El Salvador’s footsteps and push for broader BTC adoption or continue to manage its holdings more discreetly remains to be seen.
The Implications for Other Nations
Bhutan’s BTC accumulation reminds us that sovereign interest in crypto extends beyond high-profile cases like El Salvador. While El Salvador’s adoption of BTC has captured international attention, Bhutan’s quiet accumulation strategy suggests that other nations may also be exploring the benefits of crypto as part of their long-term financial planning. Smaller nations like Bhutan may see BTC as a way to diversify their reserves, reduce dependence on traditional financial institutions, or hedge against global economic uncertainties.
BTC’s decentralised nature could also appeal to countries that want to minimise their exposure to geopolitical risks associated with major fiat currencies like the US dollar or the euro. Additionally, Bhutan’s ability to quietly amass such a large amount of BTC without drawing attention speaks to the growing sophistication of the crypto markets. It also highlights the potential for other countries to be involved in BTC accumulation without publicising their strategies. The role of data analytics firms like Arkham in uncovering such holdings is also noteworthy. As crypto transactions are recorded on public blockchains, firms specialising in blockchain analysis can increasingly track and identify the activities of institutional and sovereign investors. This growing transparency could pressure more governments to publicly disclose their crypto holdings or rethink their strategies for acquiring digital assets.
Bhutan’s Bold, Under-the-Radar Strategy
Bhutan’s decision to quietly double El Salvador’s BTC holdings reflects a thoughtful, strategic approach to crypto investment. By accumulating Bitcoin without drawing international attention, Bhutan has positioned itself as a serious player in the evolving world of digital finance. The country’s decision to invest in BTC contrasts sharply with its longstanding focus on Gross National Happiness, underscoring the complexities of modern financial planning even for nations with more unconventional development philosophies.
While El Salvador’s public embrace of Bitcoin has made headlines and stirred controversy, Bhutan’s more secretive strategy could serve as a model for other countries that wish to explore the benefits of cryptocurrency without facing immediate international scrutiny. However, as the world becomes more aware of Bhutan’s BTC involvement, the kingdom may face new challenges in balancing its investments with its broader national priorities.
The coming years will reveal whether Bhutan’s bold, under-the-radar strategy will pay off or expose the country to the risks inherent in the volatile world of cryptocurrency. Either way, Bhutan’s sizable Bitcoin holdings demonstrate that even small, traditionally isolated nations recognise digital assets’ transformative potential.