Governments have been accumulating Bitcoin for some time now. The process began in 2020 in the small country of Bhutan, with the help of a thriving mining industry. As a result, it now has $1.3 billion in BTC, equivalent to 40% of its GDP.
Bhutan: a Bitcoin success story
In the field of strategic Bitcoin reserves, the highly publicized arrival of the United States at the end of last year marked a turning point. However, some countries had already been accumulating Bitcoin for several years, in various forms.
This approach was adopted by the small country of Bhutan in 2019, when BTC was worth around $5,000. At that time, a successful mining industry was established, powered by energy from its hydroelectric facilities.
It was a risky bet for a country whose gross domestic product ($2.9 billion) is far below the current value of Bitcoin ($2.125 trillion). But clearly, the test of time has been kind to it. Five years later, it holds a treasure trove of 12,062 BTC, estimated at $1.3 billion.
Bhutan holds $1.3 billion in BTC according to on-chain data
This was an opportunity for the Wall Street Journal to give a rather positive assessment of this national initiative, which aims to replenish the coffers of a state in dire straits following the Covid-19 crisis. In an article, the CEO of this sovereign wealth fund explains how Bitcoin “acts like a battery, using excess summer energy.” But that’s not all.
A Bitcoin fund representing 40% of its GDP
This principle of accumulating Bitcoin over the last five years has enabled Bhutan to become the third largest holder of BTC. And with good reason, as its digital treasure now accounts for 40% of its gross domestic product (GDP). Data validated on the X network by the CEO and co-founder of the Satoshi Action Fund, Dennis Porter.
Bhutan began mining Bitcoin in 2020. Five years later, the country has accumulated enough money to represent 40% of its GDP. This small country now has the third largest Bitcoin reserve in the world.
Dennis Porter
In fact, this Bitcoin-related mining activity has many positive repercussions for the country. According to Prime Minister Tshering Tobgay, it is helping to offset a decline in hydroelectric power exports in recent years and will also finance a pay rise for civil servants from 2023.
Some criticize Bhutan for surrounding this mining activity with a veil of secrecy through the company Green Digital. Those in charge counter this criticism by citing security concerns, in order to minimize the risks of “misuse or hacking.” In any case, the majority of Bhutanese had no idea that this national industry existed before the announcement of the civil servant pay rises.
