The Bhutanese government has begun moving a portion of its significant Bitcoin holdings, transferring over $66 million worth of Bitcoin to Binance, one of the world’s largest cryptocurrency exchanges, as the price of Bitcoin surged past the $70,000 mark. This move comes amid the recent bullish momentum that saw Bitcoin trading above this key price level for the first time since June 10, 2024.
The Transaction Details
On Oct. 29, the Bhutan government’s designated wallet transferred $66.5 million in Bitcoin across two transactions to a Binance deposit wallet, suggesting the government’s intention to sell some of its holdings. This sale may have been prompted by the strong price action above $70,000, a level known to trigger profit-taking behavior from large Bitcoin holders, often referred to as whales.
This transfer marks a significant event, as it’s the first time the government has shown signs of moving its Bitcoin stash publicly. However, this does not appear to be the entirety of the country’s holdings. The wallet still holds around $886 million worth of Bitcoin, which could contribute further selling pressure on the cryptocurrency, especially if more transfers are made.
Bhutan’s Bitcoin Mining Strategy and Economic Impact
Bitcoin mining has become a crucial part of Bhutan’s economy, with the country accumulating Bitcoin through mining activities over the past five years. According to World Bank data, Bhutan’s Bitcoin holdings now account for over 26.9% of its GDP, making the country one of the most Bitcoin-heavy nations in terms of economic reliance on cryptocurrency.
In 2023, Bhutan used the Bitcoin mining revenue from its state-run entity, Druk Holding and Investments, to fund a 50% salary increase for public servants. This highlights how the country’s Bitcoin holdings have not only contributed to its economic growth but also supported the welfare of its citizens.
Bitcoin Reserves Compared to Other Countries
As of September 2023, Bhutan’s Bitcoin holdings were twice the size of El Salvador’s, which adopted Bitcoin as legal tender back in 2021. Despite El Salvador’s Bitcoin strategy, which includes investing heavily in Bitcoin as a reserve asset, Bhutan’s reserves stand at an estimated $886 million, much larger than the $31 million in profits El Salvador has made from its Bitcoin investments.
Potential for Future Selling Pressure
Given that Bhutan holds such a large amount of Bitcoin, the potential for further selling pressure on Bitcoin remains high, especially if the price of the cryptocurrency continues to rise. As Bitcoin continues to attract attention from large institutional and governmental players, the moves of countries like Bhutan, with its significant reserves, could have a notable impact on the market.
