The Kingdom of Bhutan, a small mountainous nation in South Asia, has now transparently disclosed its Bitcoin (BTC) and cryptocurrency holdings through Arkham Intelligence. The tracking reveals that Bhutan is leveraging BTC as an additional financial tool within its economic portfolio. This revelation underscores the growing trend of smaller nations adopting cryptocurrencies to diversify their financial assets.

Arkham Intelligence’s monitoring system has identified that Bhutan’s crypto wallet contains a significant stash: 13,092 BTC, 656 Ethereum (ETH), and small amounts of tokens such as SAND and MATIC, which were either airdropped or recently acquired. This level of detail provides a clearer picture of how Bhutan is engaging with the crypto market.

Unlike typical government wallets, which usually hold confiscated coins and are not central to economic strategies, Bhutan’s approach appears more deliberate and strategic. With a Gross Domestic Product (GDP) of approximately $2.96 billion annually, the scale of Bhutan’s cryptocurrency investments—valued at just over $750 million—seems proportionate to its economic size. Remarkably, Bhutan has quietly amassed more BTC than El Salvador, which, under President Nayib Bukele, owns 5,876 BTC.

Intriguingly, the inflow of BTC into Bhutan’s wallet does not indicate aggressive buying or forced acquisition. Instead, Bhutan receives regular block rewards from its mining activities, approximately once a day, ranging from 1 to 5 BTC. This consistent mining activity has generated an estimated $1,000 per citizen, signifying a substantial contribution to the national economy.

To manage its mining proceeds, Bhutan occasionally sells portions of its BTC holdings via Kraken, moving a few hundred BTC at a time. Despite these sales, the country retains most of its mined BTC as a long-term reserve. The mining operations harness Bhutan’s abundant hydroelectric resources and were developed in partnership with Bitdeer Technologies. Druk Holding, the state’s investment arm, established a $500 million joint fund with Bitdeer to finance these mining ventures.

The government repurposed the abandoned Education City project to construct its largest mining facility. The project was initially kept under wraps, with aerial photos offering the first glimpses of the site. Reports indicate that Bhutan began mining BTC when prices were as low as $5,000, highlighting the foresight in its strategy.

Bhutan’s mining operations are designed to prioritize domestic electricity needs while utilizing excess hydroelectric power for mining. This setup ensures that mining activities do not strain local power resources. The proceeds from mining are partially sold to cover expenses such as mining equipment and power bills.

Druk Holding adopts a Bitcoin maximalist stance, focusing solely on BTC and avoiding riskier assets. Although it previously engaged with entities like BlockFi and Celsius, none of its holdings were affected by their bankruptcies. The government is committed to self-custody and steers clear of loans, decentralized finance (DeFi), or other third-party custodians.

As the main investor in Bhutan, Druk Holding has partnered with over 50 companies across various sectors, including artificial intelligence (AI), drone technologies, and hardware manufacturing. Its investment strategy spans both public and private companies and includes infrastructure projects and emerging technologies. Operating for 15 years, Druk Holding aims to secure the future of Bhutan’s citizens by betting on the long-term potential of BTC.

The mining operation collaborates with Foundry USA pool to maximize block discovery chances. Initially a solo operation until April 2021, Bitdeer then joined forces with this leading US-based mining pool. Bitdeer also provides additional services like hashrate for hire and operates mining facilities in Texas and Norway, continuously expanding its capacity.

Foundry USA controls over 24.6% of the global hashrate and solves around 30 out of every 100 blocks mined. The pool boasts participation from 1.2 million miners of varying sizes.

Among monarchies holding BTC, the United Kingdom stands out with 61,245 BTC valued at $3.54 billion, primarily from confiscations that have remained unmoved. This wallet also receives minor transactions from CoinJoin wallets regularly.

Germany is notable for having divested all its Bitcoin holdings, releasing 50K BTC into the market. The largest government-held BTC stash belongs to the US Government at 203,239 BTC, followed by China with approximately 190K BTC, mostly seized from illegal activities.

Despite concerns about rapid sell-offs on open markets, most government-held BTC remains idle or is sold through controlled methods like auctions.