Almost six months have passed since Bitcoin reached its all-time high. During this six-month downturn, national governments holding Bitcoin have shown practically no selling activity. However, we found a very interesting contrary force:
El Salvador vs Bhutan
In almost six months, El Salvador's Bitcoin reserves increased from 6,376 to 7,600, while Bhutan's reserves decreased from 6,234 to 4,000.
The pressure of sales coming from the Himalayas is not strong, but it is mysterious. Bhutan, a relatively closed Buddhist country located between China and India, only opened up to foreign tourism 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 are the result of a massive sell-off. I imagine you have many questions, but the first that needs to be answered is:
Amitabha Buddha, Bhutanese benefactor, where did your Bitcoins come from?
Hydroelectric power, a gift from the heavens
Being 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." In fact, this evaluation system, now globally famous, which asks "Are you happy?", was initially proposed by Bhutan.
If you have Buddha in your heart, the Buddha Amitabha, 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, UK.
But even with Buddhism in their hearts, people still need to live. Bhutan only stopped being listed among the "least developed countries" in December 2023. In the United Nations' "World Happiness Report," Bhutan's best ranking was 84th in 2014. In 2019, it fell even further to 95th place.
Every country has its advantages, and Bhutan's lies in hydroelectric power. Located on the southern slopes of the Himalayas, Bhutan has numerous rivers, abundant annual rainfall, and a significant elevation drop. Bhutan's theoretical hydropower potential is estimated between 30,000 and 40,000 MW, while the currently developed installed capacity is only about 2,300 to 4,000 MW, representing only 5 to 10% of its potential.
In summer, Bhutan has an inexhaustible supply of electricity. By 2025, the maximum power generation in summer in Bhutan is estimated at 3,600 MW, while the corresponding maximum daily demand in summer is only about 900 to 1,000 MW.
With over 70% of its unused electricity, Bhutan naturally sought ways to generate revenue from it by selling it to India. Hydroelectric power thus became the absolute pillar of the Bhutanese economy, representing approximately 17-20% of its GDP, and hydroelectric exports contribute over 63% of its total exports.
However, Bhutan was not entirely willing to close this deal with India. Since 1961, India has dominated the construction of almost all hydroelectric plants in Bhutan, using a financing model of "60% grant + 40% loan." In other words, India provides most of the funding for the construction of the plants, but in return, Bhutan must prioritize and sell the electricity generated back to India at a low price.
This "resource project" model has trapped Bhutan's main source of income in the rupee payment system. Although Bhutan possesses energy resources, it receives rupees that can only circulate in neighboring countries, making it difficult to exchange directly for US dollars, which are necessary for modern industry in the international market.
How to get out of this situation?
Transforming hydroelectric power into Bitcoin
Bhutan's solution is Bitcoin mining.
Around 2019 to 2020 (when Bitcoin was priced around $5,000), Bhutan began secretly testing a path called "energy digitalization" — using surplus hydroelectric power for Bitcoin mining.
In 2019, King Jigme Khesar Namgyel Wangchuck of Bhutan declared: "As a small country, we must become a smart nation — this is not a choice, but a necessity. Technology is an indispensable tool to realize this vision."
In 2025, Bhutanese Prime Minister Tshering Tobgay publicly declared: "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 abundant hydroelectric energy, Bhutan's unique climate, especially in the high-altitude central region with an average annual temperature of only 5.5°C, provides a natural cooling advantage for mining, significantly reducing energy costs.
In addition, the Bitcoin mining industry aligns perfectly with Bhutan's environmental and religious philosophies, being a Buddhist country. The Bhutanese constitution requires 60% forest cover, limiting the development of traditional heavy industry. However, hydroelectric mining is an "invisible industry" that does not emit greenhouse gases nor harm the ecosystem, making it perfectly compatible with Buddhist teachings for Bitcoin mining. On the other hand, cryptocurrencies face difficulties in Islamic countries — Islamic law (Sharia) strictly prohibits usury (Riba) and gambling (Gharar). Due to the volatility of Bitcoin prices and the lack of backing in tangible assets, some Islamic scholars (such as the Syrian Islamic Council) have issued fatwas declaring Bitcoin "haram" (a forbidden substance).
Bitcoin mining with hydroelectric power. Through Bitcoin, Bhutan found a path to economic development that breaks the "rupee blockade." However, how did a relatively closed Buddhist country achieve this innovation in the modern financial field of cryptocurrencies?
Bhutan's "Bitcoin Negotiator"
Bitcoin mining in Bhutan is not an impulsive act of the king or some zealous politician, but rather a carefully orchestrated "alternative investment" strategy by the professional technocrats of its sovereign fund, Druk Holding and Investments (DHI).
Ujjwal Deep Dahal, the current CEO of DHI, is the key figure behind Bitcoin mining in Bhutan. An electrical engineer with solid experience in the energy and water sectors, he has a deep understanding of the strengths and limitations of Bhutan's water resources before taking the lead at DHI.
According to Dahal, Bhutan faces severe geographic and demographic disadvantages ("Geography is a challenge for us, the demographic structure is a challenge for us"). He sees technology as the only way for Bhutan to achieve exponential development. In 2019, Dahal pressured DHI to secretly invest in mining machines from Bitmain. His logic was very clear: to use the "residual electricity" that Bhutan cannot export or consume during the summer rainy season to mine "digital gold" as a diversification supplement for the country's foreign exchange reserves.
In a relatively closed Buddhist country, those who managed to realize the historical opportunity represented by Bitcoin were certainly not ordinary people, but rather technocrats with high-level international academic training. Dahal's upbringing, naturally, was not marked by difficulties, but rather a typical microcosm of the Bhutanese elite. The son of a high-ranking government official, Dahal enjoyed the best educational resources in Bhutan from a young age and received the government's "Elite Scholarship" to study abroad. He attended higher education in India in his early years and later studied in Canada and the United States, even working 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 led him to propose the idea of "electricity price arbitrage" for Bitcoin mining using hydroelectric power to Bhutanese leadership when Bitcoin prices were low in 2019.
All beings are equal, but they are also unequal.
A high-risk national bet
As the goal is to generate revenue, Bhutan naturally intends to convert the "freely" mined Bitcoins using its surplus hydroelectric energy 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, faced with a severe public sector turnover crisis, the Bhutanese government used approximately $72 million of its Bitcoin reserves to grant all public employees a 50% salary increase.
On December 17, 2025, Bhutan's National Day, the country made another bold decision: to inject its entire stock of 10,000 Bitcoins (equivalent to approximately $1 billion at the time) as seed capital for the future of the country in the enormous special economic zone still under design — the "Galepu Mindfulness City (GMC)."
The financial model of GMC is considered "insane" from a macroeconomic perspective. According to Time magazine and SCMP, the total estimated investment from GMC reaches $100 billion, while Bhutan's GDP in 2025 is only $3.4 billion, which means that the total estimated investment is about 30 times the country's GDP in 2025.
Even more outrageous is the fact that this megaproject, from the announcement of its initial vision in December 2023 to the official start of construction in 2025, has already lasted more than two years and can still only be described as being in the "infrastructure construction phase."
These two actions are intriguing: why were the US dollars earned from the 13,000 Bitcoins not used to support other national industries, but instead to pay public employees, and why were another 10,000 Bitcoins spent on building a special economic zone that may not generate revenue for 5 to 10 years?
Bhutan is also powerless.
In Bhutan, the government is the largest individual employer. Due to the fragility of the private sector, the operation of the state apparatus depends entirely on the public service system. However, in recent years, Bhutan has faced inflation and brain drain. The increase in public employee salaries is primarily aimed at maintaining the functioning of the state apparatus and preventing government paralysis. Revenue from Bitcoin mining is seen as a "lifeline" to retain the country’s key talents; the focus is on "stanching the bleeding" before discussing "development."
Furthermore, support for national industries presents significant challenges for Bhutan. The country lacks the necessary industrial base to absorb such investments. Without infrastructure, logistical advantages, and with a small internal market (approximately 800,000 people), even if the government injected hundreds of millions of dollars into the private sector, it would not magically create a manufacturing or technology industry. Resources would likely be directed towards real estate speculation or used for the import of consumer goods, thus depleting precious foreign exchange reserves.
Therefore, the investment of 10,000 bitcoins in GMC is, in a way, a "desperate bet." GMC is not a tourist city but rather a "special zone" located in the southern plains of Bhutan, bordering India, which plans to establish an independent legal system (similar to that of Singapore and Abu Dhabi) to attract global capital.
It's like the "Cayman Islands at the foot of the Himalayas," offering offshore trusts, legalization of digital assets, 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. Trying to break free from exclusive dependence on India may be the best option they can conceive at the moment.
Although the total estimated investment from GMC reaches hundreds of billions of dollars, this does not mean that the Bhutanese government will actually invest all that money. Its strategy is to "build a nest to attract phoenix" — using Bitcoin and sovereign fund (DHI) resources to complete the first phase of infrastructure construction (such as airport expansion and bridge construction) and then attract global tycoons and conglomerates to make subsequent investments, transferring the rights to develop special economic zones.
Bhutan is not only "betting" outside the blockchain, but its operations in the blockchain are also much more complex than simply "mining, accumulating, and selling coins." Instead of leaving all its assets idle in cold wallets, Bhutan converted a large amount of ETH into liquid collateral tokens and deposited them as collateral on the decentralized lending platform Aave to borrow large sums of stablecoins.
Earlier this year, Bhutan went through an almost catastrophic crisis. With the drop in ETH prices, the value of Bhutan's collateral on the Aave platform decreased, and its health index for loans 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 pay off a $137 million loan in USDT. This action raised its health index back above the safe level of 1.10, preserving its remaining position of approximately 78,245 stETH.
In fact, we can trace Bhutan's "high-risk bet" even further back — because while Bhutan has a lot of Bitcoin mining, they also need mining machines.
Bhutan mainly acquires equipment from Bitmain. According to customs records and media information, 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 began sending directly tens of thousands of advanced mining machines to Bhutan.
According to a comprehensive assessment by Forbes and other institutions, Bhutan's total investment in cryptocurrency mining facilities was approximately $5 billion between 2021 and 2023. This directly led to a sharp decline in Bhutan's foreign exchange reserves, from $1.27 billion to an alarming level of just over $500 million during the same period.
According to the World Bank's "Macroeconomic Outlook for Bhutan" report released in April 2024, and the IMF's 2024 Article IV Consultation Report, Bhutan's current account deficit (CAD) increased to 34.3% of GDP in the 2022/23 fiscal year. The World Bank also explicitly highlighted—
"A significant national investment in cryptocurrency mining has led to a decline in international reserves and expanded the current account deficit to 34.3% of GDP. In 2022 alone, approximately 9% of GDP was used to import cryptocurrency devices."
A country that bets 9% of its GDP on Bitcoin is likely making one of the most risky bets in human history.
Fortunately, Bhutan's risky bet has already gone through its painful adjustment period. By 2025, with Bitcoin prices reaching an all-time high, Bhutan's fiscal situation showed significant improvement. According to the latest Article IV Consultation Report from the IMF for 2025, released in January 2026, "Bhutan's foreign exchange reserves increased significantly, thanks to reduced cryptocurrency mining-related imports, increased remittances, and higher revenues from tourism and hydropower." The projection is that Bhutan's current account deficit will decrease significantly, from its peak of 34.3% to 8.62% in the 2025/26 fiscal year. This means that the difficult period of "mining equipment purchases" has ended and the country has entered the "production and monetization period."
As a nation, Bhutan has largely overcome its painful adjustment period. But individually, has the life of Bhutanese improved because of Bitcoin?
National destiny and popular movement
The 2022 Labor Force Survey by Bhutan's National Statistics Bureau (NSB) clearly shows that the youth unemployment rate in Bhutan was indeed 28.6% in 2022. This figure is expected to decrease to 18% by 2025.
Data shows that the Bitcoin mining industry has indeed improved the lives of Bhutanese to a certain extent. However, for Bhutanese, living in Bhutan still offers little hope.
It is estimated that approximately 66,000 Bhutanese currently live abroad, with the vast majority in Australia. For this small country with a population of only around 800,000, this number represents almost 8% of the population.
In contrast, only about 3.6% of the world's population lives outside their country of birth. In India, this number is 2.5% and in Pakistan, it is 2.8%.
It is important to know that by 2025, youth will represent 45.1% of Bhutan's unemployed population. This means that the number of Bhutanese living abroad is nearly equal to the number of young unemployed 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 like Australia and Canada to study and work is steadily increasing, a trend that has caught the attention of the highest levels of government. Bhutan's Prime Minister, Tshering Tobgay, stated that among the 66,000 expatriate Bhutanese, many are experienced public officials, teachers, nurses, and other professionals.
"We cannot ask public employees not to resign, nor can we prevent people from leaving the country. I cannot guarantee that professionals will not 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, stated that there are currently more than 20,000 Bhutanese living only in Perth. He and his wife moved to Australia in 2019; prior to that, he was a forestry worker in Bhutan.
He said: "Many Bhutanese living in Australia are still seeking permanent residency because they plan to settle and not return to their home countries."
Tashi Zam left Bhutan for Australia with her boyfriend in 2018. When they graduated, between 2015 and 2016, they hadn't even considered traveling abroad.
"Our initial dream was to find a suitable job and then settle in Bhutan."
For nearly two years, they tried everything to find a job, but without success. Finally, their families pooled money to encourage them to marry, so they could apply for jobs together.
Looking back, we know we made the right choice. Now we 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 has transitioned directly from an agricultural society to a financial society, without a manufacturing/services sector capable of absorbing a large number of jobs in the meantime.
This country is rising in the cryptocurrency space, but its people still face real-life difficulties.
