Despite its small size, the Kingdom of Bhutan has emerged as a significant player in the global Bitcoin (BTC) landscape, driven by its strategic engagement in crypto mining. In 2023, Bhutan generated a substantial portion of its gross domestic product (GDP) from these activities, with crypto mining contributing approximately 28.6% of its GDP, amounting to $831 million. This significant contribution makes Bitcoin a major factor in Bhutan’s total economy, which has a GDP of about $2.9 billion.
Bhutan, similar to El Salvador, has shown considerable confidence in Bitcoin and is actively building up its reserves. This approach appears to be bolstering the country’s economy substantially. Bhutan is ranked fourth globally in terms of government-owned Bitcoin, holding 13,029 BTC, valued at around $780 million. This places Bhutan immediately after the United States, China, and the United Kingdom in terms of Bitcoin holdings.
A crucial factor in Bhutan’s success is its abundant hydropower resources, which enable the country to conduct energy-intensive mining operations in a cost-efficient manner. The mountainous landscape of Bhutan is rich in hydropower, making it an ideal location for eco-friendly mining. Since the initiation of mining activities in 2019, led by the state-owned Druk Holdings and Investments, the mining capacity has been significantly expanded. Between 2020 and 2023, Bhutan invested $539 million in mining equipment and formed a strategic partnership with Bitdeer to increase its mining capacity to 600 megawatts by 2025.
In addition to Bitcoin, Bhutan also diversifies its cryptocurrency holdings. The country holds 656.013 Ethereum (ETH), worth approximately $1.5 million, and smaller quantities of other cryptocurrencies such as those related to the metaverse project Decentraland (SAND) and Ethereum Layer 2 (L2) Polygon (MATIC).
Bhutan’s mining operations are conducted in partnership with Bitdeer, a Singapore-based mining company, which has been instrumental in enhancing the country’s mining infrastructure. The collaboration aims to develop environmentally sustainable, carbon-free digital asset mining operations, further solidifying Bhutan’s position in the cryptocurrency world.
