Bhutan Mines Bitcoin with Hydropower to Diversify Economy, Build Reserves

The Royal Government of Bhutan executed a significant cryptocurrency transfer on September 18, 2025, moving 419.5 Bitcoin (BTC) valued at approximately $47.23 million to a new wallet address. This transaction follows a prior movement of 913 BTC ($107 million) to two separate wallets on the same date, reducing the government’s total holdings from 9,652 BTC ($1.13 billion) to 9,232 BTC ($1.04 billion) as of September 2025. The transfer, tracked by blockchain analytics platforms such as Lookonchain and Arkham Intelligence, underscores Bhutan’s strategic engagement with Bitcoin as a reserve asset. The government’s Bitcoin holdings, accumulated through large-scale mining operations powered by surplus hydropower since 2019, now represent one of the largest sovereign crypto portfolios globally, placing Bhutan fourth in rankings behind the United States, China, and the United Kingdom.

Bhutan’s Bitcoin strategy is rooted in its abundant renewable energy resources. Leveraging its hydroelectric capacity—accounting for 30% of its GDP and 99.5% of its electricity in 2003—the kingdom has established multiple mining facilities, including a 600-megawatt operation in Gedu. This approach contrasts with other nations that acquire Bitcoin through seizures or purchases. By 2024, Bhutan’s investment arm, Druk Holding & Investments (DHI), had mined over 13,000 BTC, valued at $750 million, and expanded its operations in collaboration with Singapore-based Bitdeer. The government’s decision to mine rather than buy Bitcoin aligns with its broader economic goals, including diversification away from tourism and hydropower exports, while addressing energy surplus challenges.

Recent on-chain activity has raised speculation about Bhutan’s intent to monetize its holdings. Between July and September 2025, the government transferred over $200 million in BTC across multiple transactions, including a $23.73 million deposit to Binance in July. Analysts suggest these moves could indicate profit-taking amid Bitcoin’s rally to record highs, with Bhutan selling at an average price of $88,612 per BTC. However, the government retains a substantial reserve of 11,711 BTC ($1.3 billion) as of July 2025, suggesting a long-term strategy rather than a complete divestment. This approach mirrors that of El Salvador, which holds 5,800 BTC, but differs from Germany’s controversial 2024 sale of 49,858 BTC at $53,000, which analysts estimate cost the country $3 billion in potential gains.

Market reactions to Bhutan’s activity have been mixed. While some view the transfers as a signal of confidence in Bitcoin’s value, others fear short-term volatility if the government liquidates further holdings. The timing of recent movements, coinciding with the U.S. Federal Reserve’s first 2025 rate cut, has heightened sensitivity to potential sell-offs. However, Bhutan’s measured approach—selling in smaller increments rather than bulk—suggests a focus on liquidity management and treasury optimization. This contrasts with El Salvador’s buy-and-hold-only policy and the U.S.’s seizure-driven reserves, highlighting Bhutan’s unique position as a proactive, self-sustaining crypto reserve holder.

Looking ahead, Bhutan’s strategy could influence global adoption trends. By integrating Bitcoin into national infrastructure projects, such as salary payments and blockchain-based identity systems, the kingdom demonstrates how small nations can leverage digital assets for economic resilience. Its green mining model also addresses environmental concerns, offering a blueprint for sustainable crypto adoption. While risks such as market volatility and energy grid strain persist, Bhutan’s success underscores the potential for sovereign crypto reserves to reshape financial systems. As other countries observe its approach, the Himalayan kingdom’s experiment may catalyze broader acceptance of Bitcoin as both a strategic asset and a tool for economic diversification.

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