Kingdom of Bhutan holds 750 million dollars in Bitcoin

The well-known analysis platform Arkham Intelligence announced yesterday that it had located the Bitcoin addresses of Bhutan. According to the report, the Himalayan kingdom owns more than 13,000 Bitcoin worth around 750 million US dollars.

Since a report by Forbes in April last year, it has been public knowledge that the Kingdom of Bhutan holds Bitcoin via the state-owned investment company Druk Holding & Investment (DHI). This was revealed by insolvency documents of the crypto companies BlockFi and Celsius.

Shortly afterwards, DHI itself spoke out and announced that the nation had been mining Bitcoin for some time - Blocktrainer.de reported. In April of this year, the Himalayan country even expanded its mining capacity.

According to Arkham Intelligence, the Bitcoin held by the kingdom is entirely due to government mining activity.

Unlike most governments, Bhutan’s BTC does not come from law enforcement asset seizures, but from Bitcoin mining operations, which have ramped up dramatically since early 2023.
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The data identified by the analytics platform suggests that the Bitcoin nation began accumulating the asset in early 2021. However, since DHI spoke of having started with a Bitcoin price of around USD 5,000, Bhutan is likely to have owned its first Bitcoin in March 2020 at the latest. This was the last time a Bitcoin cost USD 5,000.

The exact holdings of the small South Asian nation were unknown despite knowledge of the state's involvement in Bitcoin. The website bitcointreasuries.net has so far only attributed 621 Bitcoin to the kingdom - a negligible amount at nation-state level, even for a country as small as Bhutan.

If the addresses identified by Arkham Intelligence are indeed attributable to Bhutan or DHI, the kingdom would actually be one of the nations with the largest Bitcoin position, now holding 13,029 BTC.

According to the analysis firm, the USA holds just over 200,000 Bitcoin and the UK around 60,000. Meanwhile, China is said to hold around 190,000 units. Ukraine is also said to have a considerable holding of around 46,000 units. This would be followed by Bhutan, provided the data from Arkham Intelligence is true and there are no other nations that have secretly built up a larger Bitcoin reserve.

A few months ago, Germany, or rather Saxony, sold the 50,000 or so Bitcoin in state possession that had been confiscated, attracting a lot of attention - Blocktrainer.de reported.

In the context of a population of just around 750,000 inhabitants, Bhutan's Bitcoin holdings are quite considerable - especially if you put them in relation to the kingdom's annual economic output, which is only a few billion US dollars.

El Salvador, for example, holds less than half as much as the South Asian country with 5,876 BTC, although the first nation to declare Bitcoin a legal tender has more than six million inhabitants and has actively invested in the asset.

If, as Arkham Intelligence claims, the Kingdom of Bhutan has indeed managed to build up this large Bitcoin stock with state mining operations, this shows impressively that it can pay off for a nation state to be involved as early as possible.

Especially if a country produces large quantities of renewable energy - in Bhutan's case, hydropower - it can be very lucrative to integrate Bitcoin mining facilities as flexible power consumers. If a nation then takes advantage of the potentially rising Bitcoin price by holding the mined Bitcoin, a significant improvement in government finances using Bitcoin is certainly possible. The small South Asian country of Bhutan is an impressive example of this.