It's been almost half a year since Bitcoin set a new all-time high. During this half year of decline, known national government hodlers have shown almost no selling behavior. However, we have discovered a very interesting showdown:
El Salvador VS Bhutan
Over the course of nearly half a year, El Salvador's Bitcoin holdings have increased from 6376 to 7600 coins, while Bhutan has reduced its holdings from 6234 to 4000 coins.
This sell-off from the Himalayan region is small but very mysterious. Bhutan, a relatively closed Buddhist country located between China and India, only opened to foreign tourists in 1974, introduced television and the internet in 1999, transitioned from an absolute monarchy to a constitutional monarchy in 2008, and still officially prohibits the use of plastic bags.
It is in such a country that the peak Bitcoin holdings reached 13,000 coins, and the current 4000 coins are the result of selling. I think you may have many questions, but the first question that needs to be addressed is:
Om Mani Padme Hum, respected donor from Bhutan, where did your Bitcoin come from?
Hydropower, a Gift from Heaven
As a Buddhist country, Bhutan was once very Zen.
In 1972, the King of Bhutan, Jigme Singye Wangchuck, proposed the concept of "Gross National Happiness." Yes, this now globally renowned "are you happy" assessment system was originally proposed by Bhutan.
With Buddhism in their hearts, Om Mani Padme Hum, money and fame are external to the self. In 2006, in the first "World Happiness Map" released by the University of Leicester in the UK, Bhutan ranked 8th.
But while having Buddhism in their hearts, they also need to live. Bhutan was only removed from the list of "Least Developed Countries" in December 2023. In the United Nations' "World Happiness Report," Bhutan's highest ranking was in 2014 at 84th. By 2019, it had further decreased to 95th.
Every country has its own strengths, and Bhutan's advantage is hydropower. Situated at the southern foothills of the Himalayas, Bhutan has numerous rivers, abundant annual rainfall, and significant elevation gaps. Bhutan's theoretical hydropower potential is estimated to be 30,000 - 40,000 MW, but the current installed capacity is only about 2300 - 4000 MW, realizing only 5 - 10% of its potential.
In the summer, Bhutan has surplus electricity. By 2025, Bhutan's peak summer generation is about 3600 MW, while the corresponding peak summer demand is only about 900 - 1000 MW.
70% of the surplus electricity, naturally seeking a partner for revenue generation, Bhutan sells this electricity to India. As a result, hydropower has rightfully become Bhutan's absolute economic backbone, accounting for about 17-20% of GDP, with hydropower exports contributing over 63% of the total export revenue.
However, Bhutan's participation in this trade with India is somewhat reluctant. Since 1961, India has dominated almost all of Bhutan's hydropower plant constructions and adopted a "60% grant + 40% loan" financing model. In simple terms, India foots most of the bill to help you build a power plant, but the cost is that you must prioritize and sell the output of electricity back to India at a low price.
This model of trading engineering for resources has tightly locked Bhutan's economic lifeline into the rupee settlement system. Despite holding energy resources, Bhutan receives only rupees that can circulate in neighboring countries in return, making it difficult to directly exchange for the US dollars needed for a modern industrial economy in the international market.
How to break the deadlock?
Turning Hydropower into Bitcoin
The antidote Bhutan has found is mining Bitcoin.
Around 2019 to 2020 (when the price of Bitcoin was around $5,000), Bhutan began secretly testing a path called "energy digitalization" – using excess hydropower for Bitcoin mining.
In 2019, Bhutan's King Jigme Khesar Namgyel Wangchuck stated, "As a small country, we must become a smart nation – this is not a choice but a necessity. Technology is an essential tool to achieve this vision."
In 2025, Bhutan's Prime Minister Tshering Tobgay publicly stated, "When the electricity price is good, we sell to India; when the electricity price is not good, we stay back and mine Bitcoins, which is very strategically important."
In addition to the surplus hydropower, Bhutan's unique climatic conditions, especially in the central high-altitude regions with an average annual temperature of only 5.5°C, provide a natural cooling advantage for mining, significantly reducing the energy consumption costs.
Furthermore, the Bitcoin mining industry perfectly aligns with Bhutan's environmental and religious principles as a Buddhist nation. The Bhutanese constitution mandates maintaining a 60% forest cover, limiting the development of traditional heavy industries. However, hydropower mining is a "hidden industry" that does not emit greenhouse gases or harm the ecosystem, making it permissible to mine Bitcoin without violating the teachings of the Buddha. In contrast, the troubles that cryptocurrency development has encountered in Islamic countries – in Islamic law, financial activities strictly prohibit usury (Riba) and gambling (Gharar). Due to the volatile nature of Bitcoin prices and the lack of tangible asset backing, some Islamic scholars (such as the Syrian Islamic Council) have issued Fatwas declaring Bitcoin as "Haram" (forbidden).
Mining away with abundant hydroelectric power. Through Bitcoin, Bhutan has found a way to break free from the "Rupee Trap" and embark on an economic development path. However, how did a relatively closed Buddhist country find this breakthrough path in the modern financial field of cryptocurrency?
Bhutan's "Bitcoin Mastermind"
Bhutan's Bitcoin mining endeavor was not a whim of the king or some zealous politician but a carefully planned "alternative investment" strategy by the country's sovereign wealth fund, Druk Holding and Investments (DHI).
The current CEO of DHI, Ujjwal Deep Dahal, is the key orchestrator behind Bhutan's Bitcoin mining push. An electrical engineer by profession, he holds a strong background in power and water resources. Prior to leading DHI, he had a profound understanding of Bhutan's hydropower advantages and limitations.
In Dahal's view, Bhutan faces severe geographical and demographic challenges ("Geography is a challenge for us, demography is a challenge for us"). He sees technology as the only way for Bhutan to achieve breakthrough development. In 2019, Dahal drove DHI to start a clandestine investment in Bitmain mining rigs. His logic was clear: to utilize excess "waste power" during Bhutan's summer monsoon period, which cannot be exported or absorbed domestically, to mine the "digital gold" as a diversification supplement to the nation's forex reserves.
In a relatively closed Buddhist nation, the sharp-eyed individual who was able to seize the historical Bitcoin opportunity is certainly not an ordinary person but a technocrat with a top-tier international education background. Dahal's trajectory of growth could not have been from a modest upbringing but rather a typical epitome of Bhutan's elite class. As the offspring of senior government officials, Dahal enjoyed the best educational resources Bhutan had to offer from an early age and received a government "Elite Scholarship" to study abroad. He received foundational higher education in India, pursued further studies in Canada and the United States, and even served as a researcher at MIT's Special Program for Urban and Regional Studies (SPURS).
It was the cutting-edge tech concepts he encountered at MIT, combined with Bhutan's local energy endowment, that led him to propose the "electricity price arbitrage" concept to utilize hydropower for Bitcoin mining when the Bitcoin price was in a slump in 2019.
All sentient beings are equal, yet not all sentient beings are equal.
A National-level Gamble
Since it is for revenue generation, Bhutan naturally aims to convert surplus hydroelectricity-generated Bitcoin into fiat to contribute to the nation's foreign exchange reserves. The question of "Why is Bhutan selling Bitcoin" has been answered, but we can explore further.
In June 2023, facing a severe civil servant turnover crisis, the Bhutanese government used around $72 million from its Bitcoin reserves to give all civil servants a 50% salary increase.
On December 17, 2025, Bhutan's National Day, Bhutan made another bold decision. It allocated up to ten thousand Bitcoins from its reserves (valued at approximately $1 billion at the time) as a national future seed fund, injecting all of it into the vast futuristic enclave known only on paper as the "Gyalsey Mindful City (GMC)."
The financial model of GMC is considered "wild" in macroeconomics. According to reports from Time Magazine and SCMP, GMC's estimated total investment reaches $100 billion, while Bhutan's GDP in 2025 is only about $3.4 billion, making the projected total investment approximately 30 times the country's 2025 GDP.
Even more extravagant is the fact that this grand project, announced with a preliminary vision in December 2023 and officially started in 2025, has been in a "construction phase" for over two years.
These two actions may seem puzzling—why not use the earned dollars from the previously held 13,000 Bitcoins to support other domestic industries instead of just giving money to civil servants and then spending ten thousand Bitcoins to establish an enclave that may not yield any returns for 5 to 10 years?
Bhutan is also in a difficult position.
In Bhutan, the government is the largest single employer. Due to a weak private sector, the functioning of the national machinery relies entirely on the civil service system. However, in recent years, Bhutan has been facing inflation and brain drain. Increasing civil service salaries is essentially to maintain the operation of the government and prevent a shutdown. The Bitcoin mining revenue is seen as a "life-saving fund" to retain core national talents, focusing on "stop the bleeding" before "development."
Furthermore, supporting domestic industries is quite challenging for Bhutan. The country lacks a fertile ground for receiving funds for industries. Without infrastructure, logistics advantages, and a very small domestic market (only about 800,000 people), even if the government were to inject hundreds of millions of dollars into the private sector, it would not magically create a manufacturing or tech industry. The funds would likely flow into real estate speculation or imported consumer goods, depleting precious foreign exchange reserves.
Therefore, the ten thousand Bitcoin commitment made to GMC is quite like a "reluctant gamble." GMC is not a tourist city but a "special zone" located in the plains of southern Bhutan bordering India, planning to establish an independent legal system (similar to Singapore and Abu Dhabi) to attract global capital.
It is like the "Cayman Islands beneath the Himalayas," and through partnerships with institutions like Matrixport, it offers offshore trusts, digital asset legalization, and a British-American law-based independent judicial jurisdiction. The Bhutanese government realizes that within the existing system and geographical limitations, the prospects for gradual reform remain shrouded in mist. To attempt to break free from singular reliance on India, this may be the best option they can currently think of.
Although GMC's estimated total investment scale reaches up to a trillion US dollars, it does not mean that the Bhutanese government really intends to go all-in with so much money. Their strategy is "to build a nest for the phoenix" — to use Bitcoin returns and the National Sovereign Wealth Fund (DHI) to complete the first phase of infrastructure development (such as airport expansion, bridge construction), and then through the concession of special zone development rights, attract global tycoons and consortia for follow-up investments.
Not only is Bhutan making a "gamble" off-chain, but on-chain, their operations are far from simple "mine-hold-sell." Bhutan has not let all its assets sit idle in cold storage but has converted a large amount of ETH into liquidity provider tokens and deposited them into the decentralized lending platform Aave as collateral, borrowing significant amounts of stablecoins.
Earlier this year, Bhutan experienced a harrowing "deleveraging" crisis. As the price of ETH fell, the value of Bhutan's collateral on Aave shrank, and its loan health factor once approached the 1.0 liquidation red line. To save itself, DHI was forced to urgently sell 26,535 ETH (about $60 million) in early February 2026 to repay a loan of up to $137 million USDT. This operation brought its health factor back above the 1.10 safety line, preserving the remaining stake of about 78,245 stETH.
In fact, regarding Bhutan's "gamble," we can trace it back even further — because although Bhutan mines plenty of Bitcoin, they also need mining machines.
Bhutan primarily purchases equipment from Bitmain. According to customs records and media tracking, the main imports are Bitmain's Antminer S19 series (including S19 Pro, S19 XP, etc.). And after 2023, with a cooperation agreement reached with Bitdeer (founded by Micree Zhan, Bitmain's former co-founder), Bitdeer also directly shipped tens of thousands of advanced mining machines to Bhutan.
According to a comprehensive assessment by institutions such as Forbes, Bhutan's total capital expenditure on cryptocurrency mining facilities from 2021 to 2023 was approximately $500 million. This directly led to Bhutan's foreign exchange reserves plummeting from $1.27 billion to just over $500 million during the same period.
Based on the World Bank's "Bhutan Macroeconomic Outlook 2024" released in April 2024 and the IMF's 2024 Article IV Consultation Report, in the 2022/23 fiscal year, Bhutan's Current Account Deficit (CAD) skyrocketed to 34.3% of GDP. The World Bank specifically stated—
"A significant national cryptocurrency mining investment led to a decline in international reserves and widened the CAD to 34.3% of GDP. In 2022 alone, around 9% of the GDP was used to import mining equipment."
A country putting 9% of its GDP into Bitcoin may be one of the most outrageous gambles in human history.
Fortunately, Bhutan's gamble has now passed its tumultuous phase. In 2025, as the price of Bitcoin hit a historic high, Bhutan's financial situation saw significant improvement. According to the IMF's latest "2025 Article IV Consultation Report" released in January 2026: "Bhutan's foreign exchange reserves have significantly strengthened, benefiting from reduced imports related to crypto mining, increased remittances, as well as growth in tourism and hydropower revenues." Bhutan's CAD is expected to narrow significantly from the peak of 34.3% to 8.62% in the 2025/26 fiscal year. This signifies that the "buying mining rigs" tumultuous phase is over, and the country has entered the "production and realization phase."
As a nation, Bhutan's tumultuous phase is considered to be over. So, as individuals, have the lives of the Bhutanese people become better because of Bitcoin?
National Fate and Individual Fortunes
The "2022 Labor Force Survey Report" by Bhutan's National Statistics Bureau (NSB) clearly shows that in 2022, Bhutan's youth unemployment rate was indeed 28.6%. By 2025, this figure had decreased to 18%.
From a data perspective, the Bitcoin mining industry has indeed improved the lives of the Bhutanese people. However, for the Bhutanese, living in Bhutan still remains somewhat bleak.
It is estimated that currently around 66,000 Bhutanese people live abroad, with the majority in Australia. For this small country with a population of only about 800,000, this number represents nearly 8% of the population.
In contrast, only about 3.6% of the global population lives outside their country of birth. In India, this proportion is 2.5%, and in Pakistan, it is 2.8%.
It is important to note that by 2025, the youth population in Bhutan's unemployed will reach 45.1%. This also means that the number of Bhutanese living abroad is almost equivalent to the number of unemployed youth within Bhutan.
Even living within Bhutan's urban areas does not guarantee better employment prospects due to urban development. Among the unemployed youth, 57.2% reside in urban areas.
Each year, the number of Bhutanese students and professionals going to countries like Australia and Canada for education and employment steadily increases, a trend that has caught the attention of the government's top officials. Bhutan's Prime Minister Tshering Tobgay stated that among the 66,000 Bhutanese diaspora, many are experienced civil servants, teachers, nurses, and other professionals.
"We cannot expect civil servants not to resign, nor can we stop people from leaving the country. I cannot guarantee that professionals will not resign, and when they do, they often cite a hostile work environment, which may be true."
Chimi Dorji, the President of the Bhutanese Association in Perth, Australia, mentioned that there are currently over 20,000 Bhutanese residing in Perth alone. He and his wife moved to Australia in 2019, coming from his previous position as a forestry officer in Bhutan.
He said, "Many Bhutanese living in Australia are still seeking permanent residency because they plan to settle down and not return home."
Tashi Zam left Bhutan for Australia with her boyfriend in 2018. When they graduated in 2015-2016, the thought of going abroad had not even crossed their minds:
Over the past two years, they tried everything to secure employment but to no avail. Eventually, their families pooled resources to encourage them to get married officially, so they could apply for jobs together.
The mining industry is highly automated, GMC caters to foreign elites, and Bitcoin is not a panacea that can rescue Bhutan from its severe unemployment crisis. Bhutan skipped from an agrarian society directly to a financial society, missing out on a manufacturing/service sector that could have provided ample employment opportunities.
While the country has soared in the cryptocurrency field, its people are still grappling with real-life struggles.
