Bhutan, a small landlocked country in South Asia, has been secretly investing millions of US dollars into cryptocurrency for years. Reports reveal that Druk Holding & Investments, the parent company of Bhutan, has been investing in Bitcoin mining since the cryptocurrency’s price was at around $5,000 in 2019.
Bhutan’s Bitcoin Mining Investments
Bhutan’s abundance of hydroelectric power has enabled the country to become a potential player in the cryptocurrency mining industry. The country’s surplus supply of electricity has led to the conversion of this excess into Bitcoin mining, making it an ideal location for cryptocurrency mining operations. According to analysts, Bhutan’s large hydroelectric capacity exceeds the needs of its population, making it possible for the country to invest in Bitcoin mining without affecting its energy supply.
The government’s investments in Bitcoin mining have been kept secret for years, only being recently discovered after the bankruptcy of crypto lenders BlockFi and Celsius. A government representative confirmed that Bhutan had been involved in cryptocurrency mining for several years and has been importing computer chips worth millions of dollars to support the mining industry.
Bhutan’s negotiations with Nasdaq-listed mining company, Bitdeer, founded by former Chinese billionaire Wu Jihan, have been ongoing. Bitdeer has announced that it is in discussions to secure access to a 100-megawatt data center for Bitcoin mining in Bhutan, which is scheduled to be built this quarter. However, no further information has been released about the negotiations between Bitdeer and Bhutan.
The Scalability of Bitcoin Mining in Bhutan
Based on data from the Bhutan Customs Department, the country’s cryptocurrency mining operations appear to be quite substantial. The Ministry of Finance of Bhutan’s data shows that the import of computer chips worth millions of dollars has increased significantly in 2021 and 2022, representing around 15% of the government’s annual budget and one-tenth of total trade. In 2022, computer chip imports to Bhutan amounted to $142 million.
According to analysts, the cost of a Bitcoin mining rig can vary, but it is estimated to be equal to the cost of building a football field-sized data center. Bhutan’s chip imports mostly come from China and Hong Kong, and it is unclear who is exporting and importing them. The Ministry of Finance of Bhutan noted that the imports increased in 2022, including expenses for chips by Druk Holdings & Investments for a “special project.” However, officials have not provided further information about the use of these chips.
The Future of Bitcoin Mining in Bhutan
Bhutan’s secret investments in Bitcoin mining show that the country is taking advantage of its abundant energy resources to enter the cryptocurrency market. However, it remains unclear whether the country plans to regulate and monitor the cryptocurrency industry or if it will continue to invest in it secretly. With the increasing demand for Bitcoin and other cryptocurrencies, it is likely that Bhutan’s Bitcoin mining investments will continue to grow and expand.
Conclusion
Bhutan’s foray into the world of Bitcoin mining has remained a secret for years, but with its abundance of hydroelectric power, the country has the potential to become a major player in the cryptocurrency industry. As the demand for Bitcoin continues to grow, Bhutan’s investments in cryptocurrency mining are likely to continue. However, the country needs to regulate and monitor the industry to avoid any negative impact on its economy and energy supply.
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