Bhutan’s Bitcoin (BTC) holdings are now transparently tracked through Arkham Intelligence. The holdings show another small country uses BTC as an additional financial tool in its portfolio.
Arkham Intelligence now tracks the Bitcoin and crypto portfolio of the Kingdom of Bhutan, a small mountainous country in South Asia. The recently identified wallet holds 13,092 BTC, 656 Ethereum (ETH), and dust amounts of tokens like SAND and MATIC airdropped or acquired recently.
Most government wallets contain stashes of confiscated coins and are not a central consideration. But for Bhutan, with a GDP of $2.96B per year, the scale of crypto markets looks just right. The BTC and crypto currently owned are just above $750M.
Quietly, the country also accrued more BTC than the usually vocal El Salvador. Under President Nayib Bukele, the government of El Salvador owns 5,876 BTC.
Bhutan is also a carbon-free crypto miner
The inflows of BTC into the recently identified wallet do not suggest buying or another forceful acquisition. Bhutan is actually receiving regular block rewards about once a day, ranging between 1 and 5 BTC.
So far, the mining activity has earned roughly $1,000 for every citizen of the country. Bhutan sells some of the mining proceeds, using Kraken to move a few hundred BTC at a time. Outside the small-scale selling, the Kingdom of Bhutan has retained most of its BTC as a large-scale reserve.
Bhutan’s mining operation uses the country’s hydroelectric resources and was built in partnership with Bitdeer Technologies. The state’s investment arm, Druk Holding, created a joint fund with Bitdeer, investing $500M in mining operations.
The Government of Bhutan used the now-abandoned Education City project to build its biggest mining facility. The first glimpses of the mining operation were via aerial photos, as the site was built without much publicity. Earlier reports claim Bhutan was already mining BTC when prices were as low as $5,000.
The mining operations use excess hydroelectric power while giving primacy to domestic electricity needs. Mining depends on the availability of cheap excess power, and Bhutan only sells part of the proceeds for mining machines and power bills.
The government investment company also looks like a Bitcoin maximalist, not dealing with riskier assets. Previously, Druk Holding was also dealing with BlockFi and Celsius, though none of the holdings were affected by the bankruptcy of those entities. The Bhutan government seems dedicated to self-custody and has no known exposure to loans, DeFi, or other third-party holders.
Druk Holding has partnered with more than 50 companies in its role as the main investor in the small country. The company has also branched into AI, drone technologies, hardware manufacturing, and other areas of development. The government holding combines investments in public and unlisted companies, with a mix of activities ranging from infrastructure projects to emerging technologies. The state holding has operated for 15 years with the goal of securing the future of Bhutan’s citizens and is betting on the long-term potential of BTC.
The mining operation partners with the leading Foundry USA pool, for the biggest chance to discover blocks. Bitdeer was a solo mining operation until April 2021, when it partnered with the leading US-based mining pool. Bitdeer is also active among miners based in Asia, offering additional services such as hashrate for hire. Bitdeer also runs mining locations in Texas and Norway, constantly expanding its capacity with new machines.
Foundry USA carries more than 24.6% of the known hashrate, solving around 30 out of 100 blocks. A total of 1.2M miners of all sizes have joined the pool.
Governments retain most of their holdings
When it comes to monarchies holding BTC, the United Kingdom government holds 61,245 BTC valued at $3.54B. The coins are from confiscations and have not been moved in a while. The wallet regularly receives inscriptions or dust transactions from CoinJoin wallets.
Of all government wallets, only Germany has divested all coins, putting 50K BTC on the market.
The biggest government wallet remains that of the US Government, holding 203,239K BTC. The Chinese Government also sits on around 190K BTC, mostly seized from illegal operations.
Despite fears of rapid selling on the open markets, most government wallets sit idle or divest through other procedures such as auctions.
Cryptopolitan reporting by Hristina Vasileva
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