INTRODUCTION:
For years, the narrative of "nation-state Bitcoin adoption" began and ended with President Nayib Bukele of El Salvador. But while El Salvador was buying $BTC on your Twitter feed, the Royal Government of Bhutan was mining it with their rivers.
In late 2023 and 2024, on-chain data revealed a stunning reality: Bhutan’s state investment arm, Druk Holding & Investments (DHI), held over 13,000 BTC (valued at over $1 billion). This reserve represents nearly 30% of Bhutan's entire GDP—a figure that dwarfs the holdings of El Salvador.
This approach, offers a radically different blueprint for how sovereigns can interact with digital assets.
THE ENGINE OF THIS MINING POWERHOUSE
Bhutan has a unique geographic advantage: massive rivers flowing from the Himalayas. This allows them to generate enormous amounts of hydroelectric power—far more than their small population and lack of heavy industry can consume. Earlier, Bhutan exported surplus electricity to India. This export resulted in transmission loss and negotiation friction over rates. Then Bhutan decided to use its surplus electricity to power Antminer mining rigs. Instead of selling electricity for pennies, they "export" it digitally by converting it into Bitcoin, effectively acting as a battery for value. This allows them to monetize stranded energy that would otherwise be wasted or sold at a discount. Research indicates they quietly began mining as early as 2019, when Bitcoin was priced at roughly $5,000, meaning their profit margins are astronomical compared to recent entrants.
THE MACRO HEDGE: WHY IT MATTERS:
Why would a conservative Buddhist kingdom risk its treasury on "magic internet money"? The answer lies in economic survival.
Independence from Tourism:
The COVID-19 pandemic decimated Bhutan’s tourism industry (its primary source of foreign currency). During this tough time, Bitcoin mining provided a revenue stream that required zero tourists and zero open borders.
Hard Currency Liquidity:
Bhutan’s currency, the Ngultrum, is pegged to the Indian Rupee. By mining Bitcoin, Bhutan generates an asset that can be instantly liquidated for USD, diversifying their reserves away from reliance on their giant neighbor, India.
Funding the State:
In 2023, amidst global inflation, the King used mining profits to fund a 50% salary increase for government officials and military personnel. While other nations printed money (causing inflation) to pay debts, Bhutan "printed" Bitcoin (deflationary) to pay its people.
