The Royal Government of Bhutan recently made headlines by transferring approximately 929 Bitcoin (BTC), valued at around $66.16 million, to the prominent cryptocurrency exchange Binance. This substantial transaction was first highlighted by the on-chain data service Lookonchain and has since caught the attention of crypto enthusiasts and analysts alike. The transfer was executed in two separate transactions: the initial tranche of 100 BTC, worth about $7.1 million, was sent at 9:09 am UTC, followed by a larger batch of 839 BTC, valued at approximately $59 million, at 9:56 am UTC. This movement was also confirmed by the on-chain analytics platform Arkham, which has been closely monitoring Bhutan’s Bitcoin holdings since September.
An Insight into Bhutan’s Bitcoin Strategy
This marks the first instance since July 1, when Bhutan deposited 381 BTC, valued at $24.1 million at the time, to Kraken, that the nation has transferred Bitcoin to a cryptocurrency exchange. This move has sparked widespread speculation within the Bitcoin community, as large deposits to exchanges are often seen as precursors to potential liquidation. Given Bhutan’s relatively small population of approximately 727,145, this significant transfer has led to questions regarding the government’s strategic intentions.
Why Is Bhutan Selling Bitcoin?
The motivation behind Bhutan’s recent Bitcoin transfer remains undisclosed, leaving room for speculation and analysis. Some experts suggest that Bhutan may be preparing for a market move or securing liquidity for upcoming national projects. Others believe that the government might be capitalizing on recent market gains to bolster its financial standing. Bhutan, a nation leveraging its abundant hydroelectric resources since 2019 to mine Bitcoin, has effectively transformed green energy into digital currency. This initiative aligns with a broader strategy to diversify national reserves in response to global economic trends. The country’s substantial Bitcoin reserves could potentially be utilized to fund national projects, enhance liquidity, or stabilize the local economy during financial uncertainties.
Comparing Bhutan’s Bitcoin Approach to El Salvador
Popular X user Pledditor (@Pledditor) noted that Bhutan’s view on Bitcoin might differ from that of El Salvador under President Nayib Bukele. While El Salvador has embraced Bitcoin as a long-term treasury strategy, Bhutan appears to approach it as a 5-10 year asset flip. Pledditor commented, “AFAIK, we’ve never gotten confirmation that Bhutan shares the same view as El Salvador on Bitcoin. It’s looking more like they just see Bitcoin as some sort of 5-10 year asset flip rather than a longer-term treasury strategy like El Salvador. They are going to regret this.”
Additionally, Bhutan has been accumulating 1 BTC daily since March 16, 2023, without selling any of its holdings. This strategic accumulation further underscores the nation’s layered approach to Bitcoin investment.
Management and Future Prospects
The holdings are managed by Druk Holding & Investments, Bhutan’s state investment arm. With current reserves reportedly at 12,456 BTC, valued at approximately $886 million, Bhutan ranks among the largest known nation-state holders of Bitcoin. This is noteworthy given that many countries have acquired Bitcoin through seizures related to criminal activities, whereas Bhutan has actively mined its Bitcoin.
In addition to Bitcoin, Bhutan recently transferred 228.8 Ether (ETH), worth about $600,000, to a Binance hot wallet on October 18. The nation’s remaining Ether, valued at $1.7 million, represents its only other significant crypto holding. As of now, there has been no official statement from the Royal Government of Bhutan or Druk Holding & Investments regarding these transfers. The community eagerly anticipates further information, with some hoping for insights from Prime Minister Tshering Tobgay regarding the government’s plans.
At the time of writing, Bitcoin was trading at $71,956. The crypto community continues to watch Bhutan’s moves closely, as they could offer valuable insights into the nation’s future economic strategies and its broader engagement with the world of digital currencies.
