Bhutan, The Unexpected Player

In the world of cryptocurrency, Bhutan has emerged as an unexpected player, with recent revelations shedding light on its substantial Bitcoin holdings. The discovery of Bhutan's secret crypto mining facilities has caused a stir in the global financial community, raising questions about the country's investment strategy and its impact on renewable energy resources. 

This small Himalayan kingdom, known for its commitment to sustainable development, has quietly amassed a significant Bitcoin hoard, estimated at around 13,000 BTC, now down to 12,062 BTC as of January 2025.

You'll find that Bhutan's foray into cryptocurrency investments is closely tied to its abundant hydroelectric power resources. The article will explore the country's strategic approach to Bitcoin mining, its potential implications for Bhutan's sovereign wealth fund, and the challenges posed by crypto market volatility. 

Additionally, we'll delve into the controversy surrounding Bhutan's involvement with Celsius Network, including substantial withdrawals made before the company's bankruptcy filing, and the complexities of potential clawbacks from a sovereign state.

Bhutan: A Brief Overview

Bhutan is a small Himalayan kingdom with a population of approximately 780,000. It is renowned for its commitment to sustainable development, as exemplified by its Gross National Happiness (GNH) philosophy, which prioritizes the well-being of its citizens over economic growth alone. Bhutan has a GDP per capita of around $3,400, reflecting its modest but steadily improving economy.

The nation's economy is largely driven by hydropower, which is its major export, accounting for more than 30% of GDP. Bhutan exports the majority of its electricity to India, capitalizing on its abundant water resources. Other key industries include agriculture, forestry, and tourism, with the latter having been significantly impacted by the COVID-19 pandemic. Bhutan's foray into cryptocurrency, powered by its renewable energy resources, represents a new chapter in its economic diversification efforts.

Discovery of Bhutan's Crypto Mining Facilities

Forbes Investigation Findings

You might be surprised to learn that Bhutan, the secluded Himalayan kingdom, has quietly transformed into a crypto haven. A recent analysis by Forbes has uncovered Bhutan's undisclosed state-owned Bitcoin (BTC) mining operations. The government has allocated land, funding, and energy to these secret mining facilities in hopes of mitigating an impending economic crisis.

Bhutan's interest in bitcoin mining arose as a response to the economic challenges caused by the COVID-19 pandemic. With tourism revenues and hydropower exports to India severely impacted, the country sought alternative solutions. Bhutanese officials began engaging with bitcoin miners and suppliers in 2020.

Satellite Imagery Analysis

Through satellite imagery from Planet Labs, Satellite Vu, and Google Earth, Forbes has identified four mining sites. These images reveal long rectangular mining units, data centre cooling systems, and high-capacity power lines and transformers connecting Bhutan's hydroelectric plants to the mining sites.

One of the facilities, considered the pilot location for Bhutan's Bitcoin mining endeavours, was constructed near Dochula Pass. Satellite imagery indicates that construction began in 2020 and seemingly finished in late 2022. Another mining site is located near Trongsa, the ancestral seat of the current Wangchuck dynasty, while a third is situated in the densely forested district of Dagana.

The largest and most significant mining facility is positioned on the site of a failed USD 1.00 billion government project called 'Education City.' This Bitcoin mine is concealed behind mountainous terrain but is betrayed by transformers and power lines. Historical satellite imagery reveals that its construction began in December 2021.

Government's Response to Revelations

Bhutan's sovereign investing arm, Druk Holdings & Investment (DHI), confirmed the existence of these mines but declined to disclose their locations, citing commercial sensitivity. The country's government, including the Ministry of Finance, has remained tight-lipped about its cryptocurrency activities.

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DHI, which also oversees Bhutan's flagship airline, hydroelectric power plants, and a cheese factory, has not provided detailed information on revenues or investment in bitcoin mining. However, the country experienced a significant surge in power usage by the industry in 2022, along with a substantial increase in imports of chips used for Bitcoin mining.

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Bhutan's Cryptocurrency Investment Strategy

Early Investments in Bitcoin

You might be surprised to learn that Bhutan's venture into bitcoin mining began in April 2019 when the cryptocurrency was valued at approximately USD 5000.00. The country's sovereign investment arm, Druk Holding & Investments (DHI), confirmed to local newspaper The Bhutanese that it 'entered the mining space' at this time. Leveraging its abundant hydroelectric resources, Bhutan powered its mining operations using clean energy from its rivers, fed by Himalayan glaciers.

As the global pandemic disrupted traditional revenue streams in 2020, Bhutan intensified its cryptocurrency efforts. Senior Bhutanese officials began discussions with bitcoin miners and mining equipment suppliers during this period. By 2021, Bhutan's cryptocurrency investments had expanded beyond mining, with DHI becoming a customer of crypto lenders BlockFi and Celsius, investing millions of dollars in digital assets.

Partnerships with Crypto Firms

In May 2023, Bhutan's DHI announced a partnership with Singaporean bitcoin mining giant Bitdeer. The two entities revealed plans for a USD 500 million 'green crypto mining' fund, aimed at leveraging Bhutan's renewable energy resources for blockchain technologies. This collaboration supports the country's goals for environmentally friendly mining.

Bitdeer and DHI announced their intention to increase Bhutan's mining capacity sixfold, reaching 600 MW by the first half of 2025. This upgrade was aimed at offsetting the potential impact of the upcoming bitcoin halving event. Bitdeer's chief business officer stated that the planned upgrades would raise Bhutan's mining capacity by 500 MW, building upon the existing 100 MW facility in Gedu.

Troubling History with Celsius Network

Bhutan, through its sovereign investment arm Druk Holding & Investments (DHI), became one of the largest creditors of Celsius Network, a cryptocurrency lending platform that declared Chapter 11 bankruptcy in July 2022. Celsius was plagued by mismanagement and misleading statements by its CEO, Alex Mashinsky, who repeatedly misrepresented the company's financial health and the ownership of assets held on behalf of customers. Despite portraying Celsius as profitable and stable, the company had been struggling financially since its inception.

Celsius' business model involved offering high-interest yields on crypto deposits, which were, in reality, unsustainable. This led to severe liquidity issues as the platform overextended itself, offering returns it could not back with actual earnings. As the broader crypto market crashed in early 2022, Celsius faced an insurmountable shortfall, ultimately leading to its bankruptcy filing. The company never had enough liquid assets to cover all its obligations, putting creditors in jeopardy.

During the critical 90-day period before the bankruptcy (April 14, 2022, to July 13, 2022), DHI made significant withdrawals totaling approximately $101.7 million from Celsius. These included 655 BTC ($43.7 million), 556.76 ETH ($1.93 million), 3.5 million USDC ($3.5 million), and other sizable transactions. These withdrawals fall under what are termed “preference payments,” or transfers that may be subject to clawbacks under U.S. bankruptcy law. 

Because these withdrawals occurred during the preference period, they are considered fraudulent transfers, as Celsius did not have the capital to meet all its creditor obligations. Essentially, early withdrawals like these benefited at the cost of later creditors, who were left with less that they are entitled pro rata.

However, the likelihood of recovering these funds from Bhutan is slim. As a sovereign state, Bhutan enjoys immunity from U.S. legal jurisdiction, and it would be extremely challenging to enforce clawbacks without the imposition of international sanctions. This immunity makes it highly unlikely that the Celsius bankruptcy proceedings will successfully reclaim any of the withdrawn funds, leaving other creditors at a significant disadvantage.

Bhutan Among Top 5 Bitcoin-Holding Countries

Bhutan’s unexpected rise in the cryptocurrency world has placed it among the top five countries by Bitcoin holdings, with approximately 12,000 BTC in its reserves. This positions Bhutan alongside global players such as the United States and China, though the context of these holdings differs dramatically.

Notably, the majority of Bitcoin held by countries like the U.S. (198,012 BTC) and China (190,000 BTC) comes from asset seizures—often related to criminal investigations—such as the U.S. government's seizure of Bitcoin from the Silk Road marketplace. These seized assets are typically held until they are lawfully distributed to creditors or victims, and do not represent direct investments by the respective governments.

Bhutan, along with El Salvador (which holds 6,168 BTC), stands out because its reserves are acquired through active participation in the market—either through Bitcoin mining or direct purchases. Bhutan’s holdings, sourced from its state-backed cryptocurrency mining operations, underline the country's proactive strategy to diversify its economy using its abundant hydroelectric power.

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This distinction sets Bhutan apart from other nations, making it one of the largest holders of Bitcoin reserves generated from sovereign investment, not asset seizures. That is, until we discover who is behind the mysterious Mr.100 Wallet—an enigmatic figure rumored to hold a vast fortune in Bitcoin. To dive deeper into this unfolding mystery, check out our article exploring the identity of Mr.100 and the intriguing story behind this elusive crypto player.

Bhutan sell some of it Bitcoin Holdings

Bhutan reportedly sold part of its Bitcoin holdings in 2024 to finance a major public policy move: doubling the salaries of civil servants. According to an Al Jazeera report, this bold decision demonstrates how the nation's crypto assets are not just speculative investments but tools for real economic intervention — further underlining the serious role Bitcoin now plays in Bhutan’s fiscal planning.

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Impact on Bhutan's Energy Resources

Hydroelectric Power Utilization

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You might be surprised to learn that Bhutan's venture into cryptocurrency mining has had a significant impact on its energy resources. The country's abundant hydroelectric power has become a cornerstone of its Bitcoin mining operations. With low-cost electricity and a favorable climate, Bhutan has emerged as an ideal location for crypto mining. 

The government has strategically positioned mining facilities throughout its mountainous terrain, including a large-scale operation on the former Education City project site.

Environmental Considerations

While Bhutan's use of renewable energy for mining aligns with its commitment to sustainability, there are environmental concerns to consider. The country's reliance on hydropower for mining has led to increased domestic energy consumption.

his shift has resulted in a decrease in hydropower exports to India, which has traditionally been a significant source of revenue for Bhutan. Despite the use of clean energy, the proximity of mining centers to critical infrastructure like hydroelectric power plants raises potential environmental risks.

Energy Export Implications

The impact on Bhutan's energy exports has been substantial. As domestic demand for electricity has grown, the country has seen a reduction in its surplus energy exports. Interestingly, Bhutan has found it economically advantageous to consume energy domestically from low-tariff hydropower projects while exporting energy from high-tariff projects. 

This strategy has led to a shift in energy distribution, with projects like Tala, Chukha, and Kurichu seeing 53% internal consumption and 47% exports, while the Mangdechhu project exports 77% of its energy. The decrease in energy exports has had knock-on effects on Bhutan's economy. 

The country has increased its electricity imports from India, contributing to a growing trade deficit. The World Bank estimates that the trade deficit between Bhutan and India has increased by 60% in 2022-2023. These changes in energy dynamics pose new challenges to the previously mutually beneficial hydropower cooperation between the two countries.

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Bhutan's Gelephu New Strategic Cryptocurrency Reserve

In early 2024, Bhutan made headlines by officially launching a Strategic Bitcoin Reserve (SBR) — a national initiative designed to leverage the country’s abundant hydropower to mine Bitcoin and attract global crypto investment. However, it’s important to distinguish this sovereign-level effort from a separate but related development in Gelephu, a town in southern Bhutan near the Indian border. Gelephu is the proposed site of a new Special Administrative Region (SAR) — also referred to as Gelephu Mindfulness City (GMC) — which envisions a futuristic economic hub blending Buddhist principles with cutting-edge technologies like blockchain and decentralized finance.

As part of this ambitious regional development, Gelephu has unveiled its own strategic cryptocurrency reserve, distinct from the national SBR managed by Druk Holding and Investments (DHI), Bhutan’s sovereign wealth fund. Unlike the SBR, which focuses primarily on Bitcoin accumulation and infrastructure mining, the Gelephu reserve will diversify its holdings across multiple major digital assets, including Bitcoin (BTC), Ether (ETH), and Binance Coin (BNB). This diversified approach is intended to support innovation, local development, and economic resilience within the SAR, while reinforcing Bhutan’s broader role as an emerging crypto-savvy nation.

Existing Crypto Assets Bolster Bhutan's Strategy

Bhutan’s crypto ambitions are not new. The Royal Government of Bhutan, through its commercial arm Druk Holding and Investments (DHI), already holds a substantial portfolio of digital assets. According to Arkham Intelligence, DHI controls approximately:

• 12,062 BTC, valued at $1.13 billion
• 656 ETH, valued at $1.16 million
• Smaller holdings on blockchains such as Polygon, BNB Chain, and Base.
• Even smaller meme coin / shitcoin airdrop donations to spam their way into Bhutan's strategic crypto reserve.

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Bhutan, Bitcoin, and the Future of Strategic Reserves

Bhutan’s embrace of Bitcoin is no longer a quiet experiment — it is becoming a cornerstone of national strategy. From mining operations powered by hydropower, to the formal establishment of a Strategic Bitcoin Reserve, and the emergence of Gelephu’s localized cryptocurrency initiative, the Kingdom is uniquely integrating Bitcoin into its long-term vision for sovereignty, sustainability, and digital innovation.

As Bhutan continues to deploy Bitcoin for both economic development and fiscal policy — including the unprecedented move to fund public salary increases — its model could inspire other nations exploring alternative reserve strategies beyond traditional fiat and gold. In doing so, Bhutan may be carving out a unique position on the world stage: a small Himalayan kingdom with one of the most forward-thinking crypto reserve strategies in the world.

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