A new crypto state emerges in the Himalayas: Bhutan holds double the bitcoins of El Salvador. Abundant and cheap electricity has turned this remote and peaceful Buddhist country in South Asia into an unexpected goldmine for digital currency mining.
Bhutan, a nation nestled between China and India in the Himalayas, has emerged as an unexpected center for cryptocurrencies. The state conglomerate Druk Holdings owns 13,011 bitcoins, significantly more than El Salvador’s 5,877.
This stake is valued at about $780 million, equating to roughly $1,000 in bitcoins for each of Bhutan’s 780,000 citizens.
Arkham details that this small fortune comes from bitcoin mining operations conducted by Bhutan’s investment arm, Druk Holdings, a name that is no accident: it means “Thunder Dragon” and appears on the country’s flag holding jewels as a symbol of wealth.
“We were able to corroborate the timeline of mining activity with satellite images of the facility’s construction,” Arkham notes.
The largest of these infrastructures is located on the grounds of the failed Education City, a project intended to curb emigration and reduce unemployment but has ultimately been repurposed into bitcoin factories working day and night, seven days a week.
“Unlike most governments, Bhutan’s bitcoin does not come from asset seizures by law enforcement but from bitcoin mining operations, which have increased dramatically since early 2023,” Arkham continues, placing the country now fourth among those with the most bitcoins, just behind the United States, China, and the United Kingdom, and just ahead of El Salvador.
The specific data on how many bitcoins Bhutan possesses became known this week, but its intentions had come to light earlier. In such an inaccessible and isolated place, it wouldn’t have been surprising if the news had remained hidden for years, as the authorities kept the intense activity of the mining machines secret.
However, Forbes revealed last year the location of the facilities using satellite images, exposing Bhutan’s connections to the crypto world following the bankruptcies of crypto lenders BlockFi and Celsius, where it had deposited small amounts.
Along with the bitcoins in its possession, Bhutan’s authorities also own about $35 million in Ethereum, $3 million in BNB (Binance’s token), and just $20,000 on the Polygon blockchain platform.
Among the few public communications related to Bhutan’s mysterious crypto journey, in May 2023, Singapore-based Bitdeer Technologies, listed on Nasdaq, explained in a statement that it had reached an agreement with the sovereign fund Druk Holdings to seek investors to contribute $500 million to develop green crypto mining.
The country’s hydroelectric capacity allows it to obtain clean, abundant, and cheap energy—India is one of its importers—perfectly aligning with mining, providing a competitive advantage. It only needed to significantly ramp up chip and hardware imports over the years to carry out the plan.
The end of the crypto winter, as the sector dubbed the period of low bitcoin prices—after mid-2022, it took over a year to surpass $30,000 again, less than half of the $69,000 highs reached in November 2021—has also boosted Bhutan’s latent wealth.
$780 million is no small amount for a country with a GDP of about $3 billion, leading the government to even consider selling a portion to finance salary increases.
Gross National Happiness
While there has been some opposition in El Salvador against the government investing public funds in bitcoins, perceptions seem more favorable in Bhutan. A study from the Universal Journal of Financial Economics among business students in the country showed that 91% were aware of cryptocurrencies, and the sentiment was mostly positive toward their adoption.
The strategy of its state investment arm goes far beyond digital assets, encompassing infrastructure, energy, and trending technologies like drones or data centers, as well as physical mines to extract magnesium or graphene. The outlook appears promising. The Asian Development Bank projects that Bhutan’s GDP will grow by 4.4% this year and accelerate to 7% in 2025.
In its relations with the two demographic giants that surround it, trade with India is a priority: merchandise exchanges (excluding electricity) have nearly tripled over the past decade, from $484 million in 2014-15 to $1.606 billion in 2022-23, according to Indian government data, representing about 73% of Bhutan’s total trade. Its citizens enjoy better living conditions than their Indian neighbors, with a per capita income of $4,010 compared to $2,730.
The immersion into the crypto universe is surprising, as the country has traditionally focused more on spiritual matters than financial ones.
In the late 1970s, Jigme Singye Wangchuck, the fourth monarch of Bhutan, aimed to distance his kingdom from the obsession with economic growth by coining a phrase that soon thrived abroad as a topic of the peaceful, tranquil, and pleasant lives of its inhabitants.
“Gross National Happiness is more important than Gross Domestic Product,” he said. Now, his successors have transformed Bhutan into something more than just a spiritual and well-being retreat, where earthly concerns like money also matter.