The Royal Government of Bhutan has recently made headlines by depositing a substantial amount of Bitcoin into the Binance cryptocurrency exchange. Specifically, 929 BTC were transferred at a time when Bitcoin’s price crossed the $70,000 mark for the first time since mid-June. According to Lookonchain, sources such as Arkham Intelligence confirmed that this transaction, amounting to approximately $66.16 million, was conducted through two separate transactions on October 29. This significant move indicates that the Bhutanese government is becoming increasingly active in the cryptocurrency market, holding a total of 12,456 BTC worth nearly $891 million at present.
The reasoning behind this sizeable transfer remains ambiguous. However, it is important to note that deposits to cryptocurrency exchanges are frequently indicative of an impending sale, particularly as Bitcoin recently saw an increase of over 5% within a day, climbing to over $71,700, and subsequently peaking at over $73,000. This uptick in value could explain why Bhutan opted to deposit such a significant amount into an exchange. Furthermore, this is notably the first instance of the nation moving Bitcoin to a crypto exchange since its July transaction of 381 BTC to Kraken.
In addition to Bitcoin, Bhutan has also engaged in Ethereum transactions, transferring approximately 228.8 ETH—worth around $600,000—just ten days prior to the large Bitcoin deposit. After this transaction, the wallet retains a remaining balance of 1.72 million in Ether as its sole major cryptocurrency asset. The Bhutanese strategy appears to embrace diversification, although their predominant focus remains on Bitcoin.
What sets Bhutan apart from many other nations involved in cryptocurrency is its proactive approach to Bitcoin mining. Since 2017, Bhutan has leveraged its abundant hydroelectric resources for sustainable mining operations. Unlike many countries that acquire Bitcoin through criminal seizures, Bhutan’s ethos revolves around creating a sustainable, income-generating avenue as a response to global events. Moreover, in May 2023, Bhutan forged a partnership with Bitdeer, a Nasdaq-listed mining company, to establish a mining operation that is 100% carbon-free.
Bhutan’s strategic entry into Bitcoin and cryptocurrency mining has come as a response to dwindling tourism revenues due to the COVID-19 pandemic. Local media source ‘The Bhutanese’ highlighted that the revenue generated from Bitcoin mining has been pivotal in financing a 50% salary increase for certain government officials. This novel revenue stream showcases the government’s adaptability and willingness to embrace modern financial technologies. As a result, Bhutan has now solidified its standing as the fifth-largest known national holder of Bitcoin, trailing only behind major global players such as the United States, China, the UK, and Ukraine.
As Bhutan continues to navigate the complexities of the cryptocurrency landscape, its actions demonstrate a commitment to sustainable development and innovative financial solutions that could serve as a model for other nations facing similar economic challenges.
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