The Kingdom of Bhutan is onchain and mining millions in BTC

The Kingdom of Bhutan continues to mine millions of dollars in bitcoin.

Bhutan is currently generating anywhere from 55 BTC ($3.6 million) to 75 BTC ($4.9 million) every week from its mining operations.

The government utilizes mining pools including AntPool, Braiins and Foundry, according to on-chain data via Arkham Intelligence.

Bhutan operations are backed by access to cheap, clean hydropower, and by a reported $500 million closed-ended fund launched last May. The fund is in partnership with Bitmain spinoff Bitdeer, itself operated by Bitmain co-founder and former CEO Jihan Wu.

Bhutan’s sovereign holding company, Druk Holdings, was formed in 2007 to manage investments for the crown “for the long-term benefit of the people of Bhutan.” Its portfolio includes manufacturing and construction, a bank, an airline — and crypto.

Druk’s identified onchain data shows that it’s been active in crypto since at least February 2021, when it received its first bitcoin: 0.0267 BTC ($1,770) worth around $1,280 at the time.

Following the provenance of that first deposit ends with AntPool, so that may be when Druk (or another arm of the Bhutan government) first started dabbling in bitcoin mining.

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A Forbes report last November, which sought to identify the sites of Bhutan’s four bitcoin mining farms, otherwise cited a spokesperson who’d said the fund had made a series of bitcoin investments “in a period in 2019.” Bhutan’s bitcoin mining operations then ramped up in 2020, according to an analysis of satellite imagery.

*Here’s exactly how much bitcoin Bhutan has mined over time*

It appears that Bhutan also mined ether for a time. From December 2021 right up until the network’s switch to proof-of-stake in September 2022, Bhutan received 92.53 ETH ($245,000) in a steady stream from an address tied to AntPool.

Much smaller than the 27,727 BTC ($1.36 billion) overall mined by Bhutan in the past three and a half years or so.

Bhutan chased the yield

Between 2021 and 2022, Bhutan also sent and received over $817 million in cryptocurrency — including bitcoin, tether, usdc, chainlink and ether — to and from lending platforms BlockFi, Celsius and Hodlnaut, all of which have since filed for bankruptcy.

The chart below plots Bhutan’s onchain moves against crypto’s total market cap.

Pink circles represent outflows to crypto exchanges such as Binance and Kraken, purple circles show inflows from those platforms and others back to Bhutan, and the orange and yellow ones indicate where crypto has been deposited (staked) and withdrawn (unstaked) with lending startups.

(To put the scale in perspective: The largest circles are worth around $57 million and the smallest are under $100.)

*Bhutan’s activity on crypto platforms has died down since 2022*

It’s difficult to properly calculate how much cash Bhutan’s crypto operations have brought in for government coffers.

Bhutan has sent 16,897 BTC to exchanges over the years, worth $1.1 billion now but $578.5 million at the individual time of transfers.

But it has also directed over $237 million in stablecoins and $13.4 million in ETH to trading platforms, and received sums of stablecoins, bitcoin, ether, bnb and chainlink in return.

That could imply Druk has previously actively traded crypto markets, but it’s not totally clear.

Aside from bitcoin, Druk is still holding 656 ETH ($1.74 million) — specifically wrapped beacon ETH — with those coins flowing into its addresses from Binance in March around bitcoin’s all-time high.

Druk is, however, currently sending bitcoin to exchanges at a regular pace.

It deposits bitcoin at least once a month, altogether totalling 1,358.64 BTC since June, valued at almost $90 million right now. That’s 318 BTC ($21 million) more than it mined in the same period.

Bhutan overall retains 13,119 BTC ($860.4 million) in its own addresses, the equivalent of a touch under half its total identified haul.

A modified version of this article first appeared in the daily Empire newsletter. Subscribe here so you don’t miss tomorrow’s edition.

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