Bhutan’s Secret Bitcoin Mining Operation Fueled by Hydroelectric Power

The small Himalayan kingdom of Bhutan has been discreetly running a Bitcoin mining operation, taking advantage of its abundant hydroelectric resources. Sources indicate that discussions regarding the development of sovereign mining operations have been ongoing since 2020.

The Bhutanese government recently confirmed that it began mining a few years ago when the price of Bitcoin was around $5,000. The earnings from this venture have been used to subsidize power and hardware costs. However, many details about the operation, such as its location and profitability, remain unclear.

In addition to its own mining efforts, Bhutan is negotiating with Nasdaq-listed mining company Bitdeer to build a 100-megawatt Bitcoin mining data center in the country. The deal would increase Bitdeer’s mining capacity by about 12%, adding to its existing data centers in Washington, Texas, and Norway.

Bhutan’s state-owned holding company, Druk Holding & Investments, has also invested millions of dollars into cryptocurrency holdings, unbeknownst to its citizens. This has raised concerns among international supporters who worry about the high volatility and environmental impact of such investments.

The scale of Bhutan’s mining operation is hinted at in its customs data, which shows a significant increase in imported computer chips over the past two years. The country imported around $142 million worth of computer chips in 2022 alone, accounting for about a tenth of its total inbound trade.

While the exact location and scale of Bhutan’s Bitcoin mining operation remain uncertain, it is clear that the kingdom is capitalizing on its abundant hydroelectric resources to tap into the lucrative cryptocurrency market.