‘Size does not matter’: Bhutan’s tiny sovereign wealth fund banks on green energy and Bitcoin

Bhutan’s Druk Holding & Investments (DHI), the nation’s largest government-owned holding company, is defying conventional wisdom about the scale required to drive meaningful economic impact. With fewer than 200 employees and a portfolio focused on hydropower, Bitcoin, and innovation, DHI is proving that strategic bets—rather than sheer financial firepower—can position a small fund to thrive in a world hungry for sustainable and disruptive assets.

Green Energy: The Foundation of Bhutan’s Carbon-Neutral Ambition

Bhutan’s commitment to sustainability is enshrined in its constitution, which mandates that at least 60% of its land remain forested. DHI’s green energy strategy capitalizes on this unique advantage, leveraging the country’s abundant hydropower resources to fuel both domestic needs and export revenue. A cornerstone of this strategy is the Chamkharchhu-1 hydropower project, a 770 MW facility under development with India’s Reliance Group, alongside plans for 500 MW of solar capacity. These projects align with Bhutan’s goal to remain carbon neutral while diversifying its energy portfolio.

Already, hydropower accounts for nearly all of Bhutan’s electricity generation, with surplus energy exported to India. DHI’s role here is twofold: to secure stable, long-term revenue streams from these projects and to reinforce Bhutan’s global reputation as a climate leader.

Bitcoin: A High-Risk, High-Reward Hedge Against Volatility

DHI’s entry into Bitcoin marks a bold departure from traditional sovereign wealth fund strategies. The fund reportedly invested during the 2020–2021 bear market, acquiring Bitcoin at a time when prices were depressed. While specifics on its Bitcoin holdings are scarce, the move reflects a calculated gamble on the digital asset’s long-term potential.

Critics have questioned the environmental cost of Bitcoin’s energy-intensive mining, but DHI’s strategy sidesteps this by leveraging Bhutan’s carbon-free hydropower. This creates a symbiotic relationship: Bitcoin’s energy needs are met sustainably, while the fund gains exposure to a volatile but high-growth asset class.

Tech and Innovation: A Blueprint for Future Growth

Beyond energy and crypto, DHI is investing in Bhutan’s digital transformation. In 2025, it adopted SAP’s cloud-based ERP system (RISE with SAP) to streamline operations across six functional areas, training over 100 employees in global best practices. The fund is also fostering entrepreneurship by supporting events like the National Startup Weekend 2025, which attracted 170 participants, and advancing initiatives such as the Gelephu Mindfulness City, a tech-driven hub for biotech and fintech innovation.

Risks and Challenges

DHI’s strategy is not without risks. Bitcoin’s price volatility could amplify losses during bear markets, while reliance on hydropower exposes the fund to climate-related disruptions like droughts. Additionally, Bhutan’s small economy and geopolitical isolation could limit diversification opportunities.

Yet DHI’s alignment with Bhutan’s core values—transparency, sustainability, and Gross National Happiness—creates a competitive edge. By prioritizing long-term, values-driven investments, the fund is positioning itself to capitalize on global trends: the shift to renewables, the rise of digital assets, and the demand for ethical governance.

Conclusion: Small Size, Big Vision

DHI’s success hinges on its ability to execute on two fronts: stable, low-risk returns from hydropower and high-risk, high-reward bets on Bitcoin and innovation. While the fund’s modest size limits its capacity for broad diversification, its focus on sectors with high societal and economic value—coupled with Bhutan’s unique natural advantages—creates a compelling investment thesis.

If Bhutan’s hydropower projects meet targets and Bitcoin’s price trends upward (as seen in its ~300% rise from early 2021 lows), DHI could deliver outsized returns. Even if Bitcoin falters, the fund’s green energy investments and tech initiatives provide a resilient foundation. In a world where ESG principles and digital transformation are paramount, DHI’s model—small but strategic—offers a blueprint for how agility and vision can outweigh scale.

For investors, the takeaway is clear: in a rapidly evolving global economy, the next big opportunity might just come from the smallest of players.