Almost six months have passed since Bitcoin hit its all-time high. During this six-month decline, known national governments holding Bitcoin have shown virtually no selling activity. However, we have discovered a very interesting opposing force:
El Salvador vs Bhutan
Over the course of nearly six months, El Salvador's Bitcoin holdings increased from 6,376 to 7,600, while Bhutan's decreased from 6,234 to 4,000.
The selling pressure from the Himalayas is not strong, but it is mysterious. Bhutan, a relatively closed Buddhist country located between China and India, only opened to foreign tourists for the first time in 1974, introduced television and the internet in 1999, and transitioned from an absolute monarchy to a constitutional monarchy in 2008. To this day, the government still prohibits the use of plastic bags.
This is the country that, at its peak, held 13,000 Bitcoins; the current 4,000 is the result of a massive sell-off. I imagine you may have many questions, but the first one that needs answering is:
Amitabha Buddha, Bhutanese benefactor, where did your Bitcoin come from?
Hydropower, a gift from heaven
As a Buddhist country, Bhutan used to be very Buddhist.
In 1972, the King of Bhutan, Jigme Singye Wangchuck, proposed the concept of "Gross National Happiness." Indeed, this now world-renowned "Are you happy?" evaluation system was first proposed by Bhutan.
If you have Buddha in your heart, Amitabha Buddha, then money and fame are just external things. In 2006, Bhutan ranked 8th in the first "World Happiness Map" released by the University of Leicester in the UK.
But even with Buddhism in their hearts, people still need to live. Bhutan only escaped the ranks of "least developed countries" in December 2023. In the United Nations' "World Happiness Report," Bhutan's highest ranking was 84th in 2014. By 2019, it had further slipped to 95th.
Every country has its own advantages, and Bhutan's advantage lies in hydropower. Located on the southern slopes of the Himalayas, Bhutan has numerous rivers, abundant annual rainfall, and a significant elevation difference. Bhutan's theoretical hydropower potential is estimated at 30,000-40,000 MW, while the currently developed installed capacity is only about 2,300-4,000 MW, realizing only 5-10% of its potential.
In summer, Bhutan has an inexhaustible supply of electricity. In 2025, Bhutan's peak summer power generation is estimated at 3,600 MW, while the corresponding peak daily demand in summer is only about 900-1,000 MW.
With over 70% of its electricity unused, Bhutan naturally sought ways to generate revenue from it, selling it to India. Hydropower has thus become the absolute pillar of Bhutan's economy, accounting for approximately 17-20% of its GDP, and hydropower exports contribute over 63% of its total exports.
However, Bhutan was not entirely willing to make this deal with India. Since 1961, India has dominated the construction of almost all of Bhutan's hydropower stations, using a "60% grant + 40% loan" financing model. Simply put, India provides the bulk of the funding to build the power plants, but in return, Bhutan must prioritize and sell the generated electricity back to India at a low price.
This "project-for-resources" model has locked Bhutan's economic lifeline into the rupee settlement system. Although Bhutan possesses energy resources, it receives rupees that can only circulate in neighboring countries, making it difficult to directly exchange them for US dollars needed for modern industry on the international market.
How to break out of this predicament?
Turn hydroelectricity into Bitcoin
Bhutan's solution is mining Bitcoin.
Around 2019 to 2020 (when Bitcoin was priced at around $5,000), Bhutan began secretly testing a path called "energy digitization"—using surplus 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 indispensable tool for realizing this vision."
In 2025, Bhutanese Prime Minister Tshering Tobgay publicly stated: "When electricity prices are good, we sell to India; when electricity prices are bad, we stay and mine Bitcoin. This is very strategic."
In addition to its abundant hydropower, Bhutan's unique climate, especially the central high-altitude region with an average annual temperature of only 5.5°C, provides a natural cooling advantage for mining, significantly reducing energy costs.
Furthermore, the Bitcoin mining industry aligns perfectly with Bhutan's environmental and religious philosophies as a Buddhist country. The Bhutanese constitution mandates a 60% forest cover, limiting the development of traditional heavy industry. However, hydropower mining is an "invisible industry" that does not emit greenhouse gases or damage the ecosystem, making it perfectly compatible with Buddhist teachings for Bitcoin mining. Conversely, cryptocurrencies face difficulties in Islamic countries—Sharia law strictly prohibits usury (Riba) and gambling (Gharar). Due to Bitcoin's volatile price and lack of tangible asset backing, some Islamic scholars (such as the Syrian Islamic Council) have issued Fatwa declaring Bitcoin "Haram" (a prohibited substance).
Using abundant hydropower, Bhutan has found a path to economic development by breaking through the "rupee blockade" through Bitcoin. But how did a relatively closed Buddhist country find this breakthrough in modern finance through cryptocurrency?
Bhutan's "Bitcoin Trader"
Bitcoin mining in Bhutan is not an impulsive act by the king or some zealous politician, but rather a carefully orchestrated "alternative investment" strategy by the technocrats of its sovereign wealth fund, Druk Holding and Investments (DHI).
Ujjwal Deep Dahal, the current CEO of DHI, is the key figure driving Bitcoin mining in Bhutan. An electrical engineer with a strong background in the power and water sectors, he possessed a deep understanding of the strengths and limitations of Bhutan's hydropower resources before taking the helm at DHI.
In Dahal's view, Bhutan faces severe geographical and demographic disadvantages ("Geography is a challenge for us, demography is a challenge for us"). He sees technology as the only way for Bhutan to achieve leapfrog development. In 2019, Dahal pushed DHI to secretly invest in Bitmain mining machines. His logic was very clear: to use the "waste electricity" that Bhutan cannot export or consume during the summer rainy season to mine "digital gold" as a diversification supplement to the country's foreign exchange reserves.
In a relatively closed Buddhist country, those who could keenly grasp the historical opportunity presented by Bitcoin were certainly not ordinary people, but rather technocrats with top-tier international educational backgrounds. Dahal's upbringing was naturally not one of hardship, but rather a typical microcosm of Bhutan's elite class. As the son of a high-ranking government official, Dahal enjoyed Bhutan's best educational resources from a young age and received the government's "Elite Scholarship" to study abroad. He received his basic higher education in India in his early years, and then went on to study in Canada and the United States, even serving as a researcher at MIT's SPURS (Special and Regional Studies Program).
It was the cutting-edge technological concepts he encountered at MIT, combined with Bhutan's local energy resources, that prompted him to propose the idea of "electricity price arbitrage" for Bitcoin mining using hydropower to the Bhutanese leadership when Bitcoin prices were low in 2019.
All beings are equal, yet they are also unequal.
A national-level high-stakes gamble
Since the goal is to generate revenue, Bhutan naturally intends to convert the Bitcoin mined "for free" using its surplus hydropower into electricity to contribute to the country's foreign exchange reserves. The question "Why is Bhutan selling Bitcoin?" has already been answered, but we can explore it further.
In June 2023, facing a severe crisis of civil servant attrition, the Bhutanese government used approximately $72 million of its Bitcoin reserves to give all civil servants a 50% pay rise.
On December 17, 2025, Bhutan's National Day, Bhutan made another bold decision: to inject all of its stockpiled 10,000 Bitcoins (worth approximately $1 billion at the time) as seed money for the country's future into the massive, still-on-the-blueprint special economic zone—"Galepu Mindfulness City (GMC)."
GMC's financial model is considered "crazy" from a macroeconomic perspective. According to Time magazine and SCMP, GMC's estimated total investment is as high as $100 billion, while Bhutan's GDP in 2025 is only about $3.4 billion, meaning the estimated total investment is about 30 times the country's GDP in 2025.
Even more outrageous is that this mega-project, from the announcement of its initial vision in December 2023 to the official commencement of construction in 2025, has been going on for more than two years and can still only be described as being in the "infrastructure construction phase".
These two actions are puzzling—why didn't the US dollars earned from the 13,000 Bitcoins used to support other domestic industries, but instead just paid money to civil servants, and then spent another 10,000 Bitcoins to build a special economic zone that may not generate any revenue for 5-10 years?
Bhutan is also helpless.
In Bhutan, the government is the largest single employer. Due to the weakness of the private sector, the operation of the state apparatus relies entirely on the civil service system. However, in recent years, Bhutan has faced inflation and a brain drain. Raising civil servants' salaries is essentially to maintain the operation of the state apparatus and prevent government shutdown. Bitcoin mining revenue is seen as a "lifeline" to retain the country's core talent; the focus is on "stopping the bleeding" before discussing "development."
Furthermore, supporting domestic industries presents significant challenges for Bhutan. Bhutan lacks the industrial foundation to absorb such investment. Without infrastructure, logistical advantages, and a tiny domestic market (approximately 800,000 people), even if the government were to inject hundreds of millions of dollars into the private sector, it wouldn't magically create a manufacturing or technology industry. The funds would most likely flow into real estate speculation or be used to import consumer goods, thereby depleting precious foreign exchange reserves.
Therefore, the commitment of 10,000 bitcoins to GMC is somewhat like a "desperate gamble." GMC is not a tourist city, but a "special zone" located in the plains of southern Bhutan bordering India, which plans to establish an independent legal system (similar to Singapore and Abu Dhabi) to attract global capital.
It's like the "Cayman Islands at the foot of the Himalayas," offering offshore trusts, digital asset legalization, and an independent jurisdiction based on Anglo-American law through partnerships with institutions like Matrixport. The Bhutanese government recognizes that the prospects for gradual reform remain shrouded in uncertainty due to existing institutional and geographical constraints. Attempting to break free from its sole dependence on India may be the best option they can currently conceive of.
Although GMC's estimated total investment is as high as hundreds of billions of dollars, it does not mean that the Bhutanese government is All In going to go all in with that much money. Their strategy is to "build a nest to attract phoenixes"—using Bitcoin proceeds and the sovereign wealth fund (DHI) to complete the first phase of infrastructure construction (such as expanding the airport and building bridges), and then attract global tycoons and conglomerates to make subsequent investments by transferring the development rights of special economic zones.
Bhutan is not only "gambling" off-chain, but their on-chain operations are also far more complex than simply "mining, hoarding, and selling coins." Instead of letting all their assets sit idle in cold wallets, Bhutan has converted a large amount of ETH into liquid collateral tokens and deposited them as collateral on the decentralized lending platform Aave to borrow huge sums of stablecoins.
Earlier this year, Bhutan experienced a near-fading crisis. As the price of ETH fell, the value of Bhutan's collateral on Aave shrank, and its health factor for lending approached the liquidation threshold of 1.0. In an effort to save itself, DHI was forced to urgently sell 26,535 ETH (approximately $60 million) in early February 2026 to repay a $137 million USDT loan. This action brought its health factor back above the safe level of 1.10, preserving its remaining position of approximately 78,245 stETH.
Actually, we can trace Bhutan's "high-stakes gamble" back even further—because although Bhutan has a lot of Bitcoin mining, they also need mining machines.
Bhutan primarily purchases equipment from Bitmain. According to customs records and media tracking, the imports mainly consist of Bitmain's Antminer S19 series (including the S19 Pro and S19 XP). After 2023, with the partnership with Bitdeer, founded by Jihan Wu (former co-founder of Bitmain), Bitdeer also directly shipped tens of thousands of advanced mining machines to Bhutan.
According to a comprehensive assessment by Forbes and other institutions, Bhutan's total capital expenditure on cryptocurrency mining facilities was approximately $500 million from 2021 to 2023. This directly led to a sharp drop in Bhutan's foreign exchange reserves from $1.27 billion to a dangerous level of just over $500 million during the same period.
According to the World Bank's "Bhutan Macroeconomic Outlook" released in April 2024 and the IMF's Article IV Consultation Report 2024, Bhutan's current account deficit (CAD) surged to 34.3% of GDP in fiscal year 2022/23. The World Bank further explicitly pointed out—
"A significant national investment in cryptocurrency mining has led to a decline in international reserves and expanded CAD to 34.3% of GDP. In 2022 alone, approximately 9% of GDP was used to import crypto devices."
A country betting 9% of its GDP on Bitcoin is likely one of the wildest gambles in human history.
Fortunately, Bhutan's high-stakes gamble has passed its painful adjustment period. In 2025, with Bitcoin prices reaching an all-time high, Bhutan's fiscal situation saw a significant improvement. According to the IMF's latest Article IV Consultation Report for 2025, released in January 2026, "Bhutan's foreign exchange reserves have increased significantly, thanks to a decrease in imports related to cryptocurrency mining, an increase in remittances, and an increase in tourism and hydropower revenue." Bhutan's CAD is projected to narrow considerably from its peak of 34.3% to 8.62% in fiscal year 2025/26. This means that the painful period of "buying mining equipment" is over, and the country has entered the "production and monetization period."
As a nation, Bhutan has largely passed its painful adjustment period. But as individuals, have Bhutanese lives improved because of Bitcoin?
National destiny and people's movement
The National Statistical Office of Bhutan (NSB)’s 2022 Labour Force Survey clearly shows that the youth unemployment rate in Bhutan was indeed 28.6% in 2022. This figure is projected to decrease to 18% by 2025.
Data shows that the Bitcoin mining industry has indeed improved the lives of Bhutanese people to some extent. However, for Bhutanese people, living in Bhutan still offers little hope.
It is estimated that approximately 66,000 Bhutanese currently live overseas, the vast majority of whom reside in Australia. For this small country with a population of only about 800,000, this figure represents nearly 8% of its population.
In contrast, only about 3.6% of the world's population lives outside their country of birth. In India, this figure is 2.5%, and in Pakistan, it is 2.8%.
It's important to know that by 2025, youth will account for 45.1% of Bhutan's unemployed population. This means that the number of Bhutanese living abroad is almost equal to the number of unemployed youth in Bhutan.
Even living in a Bhutanese city does not guarantee better job prospects simply because the city is more developed. Among unemployed youth, 57.2% live in cities.
Every year, the number of Bhutanese students and professionals going to countries such as Australia and Canada for study and employment is steadily increasing, a trend that has attracted the attention of the highest levels of the government. Bhutanese Prime Minister Tshering Tobgay stated that among the 66,000 Bhutanese expatriates, many are experienced civil servants, teachers, nurses, and other professionals.
"We can't ask civil servants not to resign, nor can we stop people from leaving the country. I can't guarantee that professionals won't resign, and when they do, they often cite poor working conditions, which may be true."
Chimi Dorji, president of the Bhutanese Association in Perth, Australia, said there are currently more than 20,000 Bhutanese living in Perth alone. He and his wife moved to Australia in 2019; before that, he was a forestry official in Bhutan.
He said, "Many Bhutanese living in Australia are still seeking permanent residency because they plan to settle down and not return to their homes."
Tashi Zam left Bhutan for Australia with her boyfriend in 2018. When they graduated in 2015-2016, they hadn't even considered traveling abroad.
"Our initial dream was to find a suitable job and then settle down in Bhutan."
For nearly two years, they tried every possible means to find a job, but to no avail. Finally, their families pooled their money to encourage them to get married so that they could apply for jobs together.
Looking back now, we know we made the right choice. We now have a good income and can help our families.
Mining farms are highly automated, GMC caters to foreign elites, and Bitcoin is not a panacea; it cannot solve Bhutan's severe unemployment crisis. Bhutan jumped directly from an agricultural society to a financial society, missing a manufacturing/service sector capable of absorbing a large number of jobs in between.
This country is soaring in the cryptocurrency space, but its people are still struggling in real life.
