Bhutan Moves $40 Million Bitcoin in Bold Transfer

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  • Bhutan is the world’s fourth-largest government holder of Bitcoin, at 11,700 BTC.
  • The nation’s mining-powered Bitcoin reserves account for 26.9% of its GDP.

As a seasoned analyst with over two decades of experience in global finance and technology markets, I find Bhutan’s Bitcoin strategy to be nothing short of remarkable. The nation’s strategic use of its massive hydroelectric resources to power Bitcoin mining is not just innovative but also visionary, especially considering the significant impact it has on their GDP.

On December 9th, as a researcher studying cryptocurrency transactions, I observed that Bhutan’s Royal Government transferred 402 Bitcoins valued at approximately $39.56 million to QCP Capital. This observation is based on data provided by blockchain analytics company SpotOnChain. Notably, Bhutan has been steadily selling its Bitcoin reserves since October, and the pace of these sales appears to be picking up steam.

According to SpotOnChain, a government-linked digital wallet from Bhutan has sold 1,696 Bitcoins, which amounts to approximately $139 million when averaged at a price of $81,999 per BTC. These transactions were handled by Binance and QCP Capital.

In October, Bhutan transferred 929 Bitcoins to Binance, which equates to approximately $66.16 million. This was the second significant sale made after Bitcoin surpassed $70,000. Earlier, in July, the government had deposited about 381 Bitcoins worth around $24.1 million into Kraken.

Presently, Bhutan maintains approximately 11,700 Bitcoins, valued at around $1.15 billion, across seven digital wallets. The Druk Holding & Investments, a state-owned investment entity, oversees the management of these reserves. As such, Bhutan ranks fourth globally in terms of Bitcoin holdings among governments.

Bitcoin Mining Drives Economic Growth in Bhutan

Bhutan’s approach to bitcoin is unique compared to other nations, as it heavily relies on mining activities driven by abundant hydroelectric power. The country began mining Bitcoin back in 2019 when the value of one Bitcoin was around $5,000, and by 2023, its reserves had grown significantly enough to represent approximately 26.9% of Bhutan’s total GDP, which amounted to $2.9 billion that year.

The nation is increasing its mining infrastructure and aims to boost its power output by an additional 500 megawatts by mid-2025. At present, it has a capacity of 100 megawatts. In May 2023, a $500 million fund was set up in collaboration with Bitdeer Technologies Group to intensify mining efforts in other regions.

Despite the concerning spike in Bitcoin’s current price, long-term analysts remain optimistic about its future. In fact, Standard Chartered has predicted that by the end of 2025, Bitcoin could be worth 200K. This positive outlook is further reinforced by the increasing influx of institutional investments, such as MicroStrategy’s recent ones, and growing interest from tech giants like Amazon and Microsoft.

Bhutan has joined the field of digital finance innovations. In 2021, it teamed up with Ripple to digitize its local currency. The goal is to improve digital payments, facilitate cross-border transactions, and increase financial access to promote a closer integration of cryptocurrency within Bhutan’s economy.

Despite the unclear reasons for these latest Bitcoin transactions, it’s clear that the nation’s cryptocurrency mining and digital finance initiatives are strategically significant. They undeniably position the country to leverage cryptocurrencies as part of its economic growth strategy.

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2024-12-12 17:07