Half a year has passed since Bitcoin reached its all-time high. During this half-year pullback, it’s known that nearly all government-held entities with Bitcoin have had little to no selling activity; however, we’ve discovered a pair of very interesting counterparties:

El Salvador vs. Bhutan

Over nearly half a year, El Salvador’s Bitcoin holdings increased from 6,376 BTC to 7,600 BTC, while Bhutan reduced its holdings from 6,234 BTC down to 4,000 BTC.

This wave of selling pressure, coming from the Himalayas, isn’t large—but it’s mysterious. Bhutan, a relatively closed Buddhist country located between China and India, opened up to foreign tourists for the first time only in 1974, introduced television and the internet only in 1999, transitioned from an absolute monarchy to a constitutional monarchy only in 2008, and to this day the government still bans the use of plastic bags.

It’s in such a country that Bitcoin holdings reached 13,000 BTC at their peak; and now, the 4,000 BTC is the result after selling—selling—selling. I imagine you may have many questions, but the first one we need to address is:

Amitābha, Bhutanese benefactor—where did your Bitcoin come from?

Hydropower, a gift from the heavens

As a Buddhist country, Bhutan used to be very “Buddha-like.”

In 1972, Bhutan’s king Jigme Singye Wangchuck proposed “Gross National Happiness” (GNH). Yes, the “Are you happy?” evaluation system that’s famous around the world today was originally put forward by Bhutan.

With the Buddha in your heart, Amitābha—money and status are things outside the self. In 2006, in the first “World Happiness Map” released by the University of Leicester in the UK, Bhutan ranked as high as 8th.

But even with the Buddha in your heart, you still have to live. Bhutan only exited the category 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 slid further to 95th.

Every country has its own advantages. Bhutan’s advantage is hydropower. Located on the southern foothills of the Himalayas, Bhutan has many rivers, abundant rainfall, and an enormous elevation drop. Bhutan’s theoretical hydropower potential is estimated at 30,000–40,000 MW, while its currently developed installed capacity is only about 2,300–4,000 MW, realizing just 5–10% of that potential.

In summer, Bhutan even has more electricity than it can use. In 2025, Bhutan’s estimated summer peak generation is about 3,600 MW, but the corresponding peak of everyday summer demand is only about 900–1,000 MW.

With over 70% of the electricity unused, it naturally looks for a buyer to generate revenue. Bhutan sells this electricity to India. And hydropower, naturally, becomes Bhutan’s absolute economic backbone—about 17–20% of GDP—and hydropower exports account for more than 63% of total exports.

But this trade with India isn’t something Bhutan is particularly willing to do. Since 1961, India has dominated the construction of almost all Bhutan’s hydropower stations and adopted a funding model of “60% grants + 40% loans.” Put simply, India covers most of the cost to help you build power plants, but the price is that you must prioritize and return-sell the generated electricity to India at low prices.

This “build infrastructure in exchange for resources” model tightly locks Bhutan’s economic lifeline into a rupee settlement system. Bhutan may hold energy in hand, but what it receives back is only rupees that can circulate within neighboring countries—making it difficult to directly obtain the U.S. dollars of foreign exchange needed for modern industry on the international market.

How do you break the deadlock?

Turn hydropower into Bitcoin

The cure Bhutan found is mining Bitcoin.

Around 2019 to 2020 (when Bitcoin was priced around $5,000), Bhutan began secretly testing a path called “energy digitization”—using surplus hydropower to mine Bitcoin.

In 2019, King Wangchuck said, “As a small country, we want to become a wise nation—that is not a choice, but a necessity. Technology is an indispensable tool to realize this vision.”

In 2025, Bhutan’s Prime Minister Tshering Tobgay publicly said, “When electricity prices are good, we sell to India; when electricity prices are not good, we stay and mine Bitcoin. This is of very strategic significance.”

In addition to surplus hydropower, Bhutan’s unique climate—especially the mid-to-high altitude region in the center with an average annual temperature of just 5.5°C—also provides a natural cooling advantage for mining, sharply reducing mining energy consumption costs.

Moreover, Bitcoin mining perfectly aligns with Bhutan’s environmental and religious principles as a Buddhist country. Bhutan’s constitution requires maintaining 60% forest coverage, which limits the development of traditional heavy industry. But hydropower-based mining is an “invisible industry” that does not emit greenhouse gases or damage the ecosystem. Using it to mine Bitcoin doesn’t contradict the Buddha’s teachings at all. By contrast, the troubles that cryptocurrencies encounter in Islamic countries—Islamic law strictly prohibits usury (Riba) and gambling (Gharar) for financial activities. Because Bitcoin’s price fluctuates drastically and lacks real-world asset backing, some Islamic scholars (such as the Islamic Council of Syria) issued a fatwa declaring Bitcoin “haram” (Haram, prohibited).

Using plenty of hydropower to mine, mine, mine. Through Bitcoin, Bhutan has found an economic development path to break through the “rupee blockade.” But how did a relatively closed Buddhist country find a breakthrough path into this modern financial field of cryptocurrency?

Bhutan’s “Bitcoin operators”

Bhutan’s Bitcoin mining was not an impulsive act by the king or some radical politician; it was an “alternative investment” strategy carefully planned by the professional technical bureaucrats of its sovereign wealth fund, Druk Holding and Investments (DHI).

DHI’s current CEO, Ujjwal Deep Dahal, is the core operator driving Bhutan’s Bitcoin mining. He is an electrical engineer, with deep experience in the power and water conservancy sectors. Before taking charge of DHI, he had a deep understanding of Bhutan’s hydropower resources—their advantages and limitations.

In Dahal’s view, Bhutan faces severe disadvantages in terms of geography and demographics (“Geography is a challenge for us, demography is a challenge for us”). He sees technology as the only route for Bhutan’s leapfrog development. In 2019, Dahal pushed DHI to begin secretly investing in Bitmain mining machines. His logic was very clear: use the “wasted electricity” that Bhutan cannot export and cannot absorb during the summer wet season to mine “digital gold,” as a diversified supplement to the country’s foreign exchange reserves.

In a relatively closed Buddhist country, those who can sharply seize Bitcoin’s historical opportunity are, of course, not ordinary people—but rather technical bureaucrats with internationally top-tier educational backgrounds. Dahal’s growth trajectory could not possibly have come from hardship; it is naturally a typical snapshot of Bhutan’s elite class. As the son of a senior government civil servant, Dahal enjoyed the best education resources in Bhutan from a young age, and received the government’s “Elite Scholarship” to study abroad. Early on, he received foundational and higher education in India, then went on to further study in Canada and the United States; he even served as a researcher at MIT’s SPURS (Special Program for Urban and Regional Studies).

It was precisely the cutting-edge technology concepts he encountered at MIT—combined with Bhutan’s local energy endowments—that led him, when Bitcoin prices were low in 2019, to propose the “electricity price arbitrage” plan to Bhutan’s top leadership: using hydropower to mine Bitcoin.

All sentient beings are equal, and yet sentient beings are not equal.

A national-level gamble

Since it’s for revenue generation, the Bitcoin mined “for free” from surplus hydropower naturally needs to be realized into cash to contribute to the country’s foreign exchange reserve. “Why is Bhutan selling Bitcoin?” That question has an answer—but we can explore further.

In June 2023, facing a serious crisis of civil servant attrition, the Bhutanese government used about $72 million of its Bitcoin reserves to give all civil servants a 50% pay raise.

On December 17, 2025, Bhutan’s National Day. Bhutan made another bold decision: it would take its largest accumulated stash—up to 10,000 Bitcoin (based on market value at the time, worth roughly $1 billion)—as the country’s future seed fund, and inject it all into that massive special economic zone still on the drawing board: “Geleph Mindfulness City (GMC).”

GMC’s financial model is, in macroeconomics terms, downright “crazy.” According to reports by Time 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 investment is roughly 30 times the country’s 2025 GDP.

Even more startling: after the project announced an initial vision in December 2023 and only began formal construction in 2025, more than two years have passed, and it can still only be described as being in a “infrastructure construction phase.”

These two actions easily leave people confused—after all, with 13,000 Bitcoins in the past, why not use the earned dollars to support other domestic industries? Instead, it gives money to civil servants, and then spends 10,000 Bitcoins to build a special zone that may produce no returns for 5 to 10 years.

Bhutan also has no choice.

In Bhutan, the government is the largest single employer. Because the private economy is weak, the country’s machinery runs entirely on the civil servant system. However, in recent years, Bhutan has faced inflation and talent drain. Raising civil servants’ wages is, in essence, to keep the state machine running and prevent government shutdowns. Bitcoin mining revenue is viewed as “life-support money” to retain the country’s core talent—first talk about “stopping the bleeding,” then talk about “development.”

In addition, supporting domestic industries is extremely difficult for Bhutan. Bhutan lacks an industrial ecosystem that can absorb capital. Without infrastructure, without logistics advantages, and with a very small domestic market (only about 800,000 people), even if the government hands out a few hundred million dollars to the public, it can’t magically create a manufacturing industry or a technology industry out of thin air. The funds will most likely flow into real estate speculation or become imported consumer goods, thereby consuming precious foreign exchange reserves.

Therefore, the promise of 10,000 Bitcoins made for GMC feels very much like a “helpless gamble.” GMC is not a tourism city; it is a “special zone” located in the plains in southern Bhutan near the border with India, where an independent legal framework is planned (ref. Singapore and Abu Dhabi) to attract global capital.

It’s like “the Cayman Islands under the Himalayas.” Through cooperation with institutions such as Matrixport, it offers offshore trusts, legalization of digital assets, and an independent judicial jurisdiction based on English and American law. The Bhutanese government realized that, under existing institutional and geographic constraints, the prospects for incremental reform remain clouded. To try to break away from single-point dependence on India may be their best option for now.

Although GMC’s estimated total investment reaches as high as a trillion dollars, that doesn’t mean the Bhutanese government truly plans to go all-in and put all that money on the line. Their strategy is “bring in investment by attracting birds to build nests”—using Bitcoin earnings and the sovereign wealth fund (DHI) to complete the first phase of infrastructure construction (such as expanding the airport, building bridges), and then by transferring development rights for the special zone, attract wealthy individuals and corporations worldwide for subsequent investment.

Bhutan isn’t just “gambling” off-chain; on-chain, its operations are also far from simply “mine-then-hold-then-sell.” Bhutan hasn’t put all its assets into cold wallets to sit idle. Instead, it has converted a large amount of ETH into liquid staking tokens and deposited them into the decentralized lending platform Aave as collateral, borrowing large amounts of stablecoins.

Earlier this year, Bhutan also experienced a risky “deleveraging” crisis. As the price of ETH fell, the value of Bhutan’s collateral on Aave shrank, and the health factor of its loans once approached the liquidation line near 1.0. To save itself, in early February 2026, DHI was forced into an emergency sale of 26,535 ETH (about $60 million) to repay USDT loans totaling as much as $137 million. This move pulled its health factor back above the safe line of 1.10, preserving the remaining position of roughly 78,245 stETH.

Actually, we can trace Bhutan’s “gamble” even further back—because even though Bhutan has plenty of electricity to mine Bitcoin, it also needs mining rigs.

Bhutan mainly purchases equipment from Bitmain. According to customs records and media tracking, the imported devices are mainly Bitmain’s Antminer S19 series (including S19 Pro, S19 XP, etc.). And after 2023, as a result of cooperation with Bitdeer (Bitdeer, founded by Wu Jihan—Bitmain’s former co-founder), Bitdeer also directly shipped tens of thousands of advanced mining machines to Bhutan.

Based on comprehensive assessments by institutions like Forbes, from 2021 to 2023 Bhutan’s total capital expenditure on crypto mining facilities was about $500 million. This directly led Bhutan’s foreign exchange reserves to drop dangerously from $1.27 billion to more than $500 million over the same period.

According to Bhutan’s “Macroeconomic Outlook” released by the World Bank in April 2024 and the IMF’s 2024 Article IV consultation report, in fiscal year 2022/23 Bhutan’s current account deficit (CAD) surged to 34.3% of GDP. The World Bank even stated clearly—

“A major national investment in crypto currency mining led to a decline in international reserves and expanded the CAD to 34.3% of GDP. In 2022 alone, about 9% of GDP funds were used to import crypto-related equipment.”

A country betting 9% of GDP on Bitcoin may be one of the craziest gambles in human history.

Luckily, Bhutan’s gamble has already passed the pain phase. In 2025, as Bitcoin’s price hit a new all-time high, Bhutan’s fiscal situation improved significantly. According to the latest IMF “2025 Article IV consultation report” released in January 2026: “Bhutan’s foreign exchange reserves have increased significantly, thanks to reduced imports related to crypto mining, increased remittances, and higher income from tourism and hydropower.” Bhutan’s CAD is expected to narrow sharply from the 34.3% peak to 8.62% in fiscal year 2025/26. That means the pain phase of “buying mining rigs” is over, entering the “production and monetization phase.”

As a country, Bhutan’s pain phase is essentially over. So for individuals, has life for Bhutanese people become better because of Bitcoin?

The fate of the nation and the fate of the people

The National Statistics Bureau (NSB) of Bhutan’s “2022 Labour Force Survey Report” clearly shows that in 2022 Bhutanese youth unemployment was indeed 28.6%. In 2025, this figure dropped to 18%.

From the data, the Bitcoin mining industry has indeed improved life for Bhutanese people. But for Bhutanese people, living in Bhutan still doesn’t look like there’s much hope.

It’s estimated that currently about 66,000 Bhutanese people live overseas, the vast majority in Australia. For a small country with only about 800,000 people, this number is close to 8% of the population.

Correspondingly, globally only about 3.6% of the population lives outside their birth country. In India, this proportion is 2.5%, and in Pakistan it is 2.8%.

Remember: among Bhutan’s unemployed in 2025, the share of youth reaches 45.1%. That means the number of Bhutanese people living abroad is almost the same as the number of unemployed youth in Bhutan.

Even if you live in Bhutan’s cities, you still won’t necessarily have better employment prospects just because the city is more developed. Among unemployed youth, 57.2% live in cities.

Each year, the number of Bhutanese students and professionals going to study and work in countries such as Australia and Canada keeps growing. This trend has caught the attention of senior government leadership. Bhutan’s Prime Minister Tshering Tobgay said that among the 66,000 Bhutanese overseas expatriates, many are experienced civil servants, teachers, nurses, and other professionals.

“We can’t require civil servants to not resign, and we can’t stop people from leaving this country. I can’t guarantee that professionals won’t resign, and when they do resign, they often mention that the work environment is poor—which may indeed be true.”

Chimi Dorji, chairman of the Bhutanese Association in Perth, Australia, said that currently there are more than 20,000 Bhutanese people living in Perth alone. He and his wife moved to Australia in 2019, and before that, he was 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 she and her boyfriend graduated in 2015–2016, they hadn’t even thought about traveling abroad:

“Our original dream was to find a suitable job, and then settle in Bhutan.”

Over the past two years, they pulled out all the stops to apply for jobs, but to no avail. In the end, their families pooled money to encourage them to get married formally so they could apply for jobs together.

“Looking back now, the choices we made were right. We now have decent income, and we can also help our family members back home.”

Mining sites are highly automated, and GMC is a service hub for foreign elites. Bitcoin isn’t a cure-all that can rescue Bhutan from its severe unemployment crisis. Bhutan skipped from an agricultural society straight into a financial society, missing the manufacturing/services sectors that can absorb large amounts of employment in between.

This country has soared in the crypto field, but its people still find themselves scattered and struggling in real life.

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