Bhutan, a small kingdom in the East Himalayas, is demonstrating how developing nations can utilize Bitcoin mining to boost their economies and achieve economic growth. Onchain analytics platform Arkham Intelligence recently identified Bhutan’s investment arm, Druk Holding and Investments, as the owner of the country’s first Bitcoin address. It was revealed that DHI holds a significant amount of Bitcoin, Ether, BNB, and Polygon, totaling approximately $780 million. These crypto holdings account for over 26.9% of Bhutan’s national gross domestic product (GDP) in 2023, according to World Bank data.
Many countries worldwide are facing increasing debt levels and economic challenges. This mounting debt crisis has prompted discussions about the long-term sustainability of current economic models, particularly in poorer countries that rely on external loans. Michael Saylor, founder and chairman of MicroStrategy, emphasized during the Bitcoin 2024 conference how nations, especially those with substantial debt, could use Bitcoin to address their economic problems. He proposed reallocating treasury reserves from assets like gold and bonds to Bitcoin, leveraging its growth potential to pay off debt and potentially achieve economic prosperity.
Bhutan, classified as a developing country by the World Bank, serves as a powerful example for other nations in a similar economic situation. Paraguay, Venezuela, El Salvador, Argentina, and Kenya are some potential candidates that could follow Bhutan’s lead in addressing their national debt. Paraguay, with its abundant hydroelectric energy resources, has taken steps towards regulating Bitcoin mining. However, political challenges have hindered the country from fully utilizing its surplus energy for cryptocurrency mining. Venezuela, rich in oil and natural gas, has faced economic crises and power outages that have hampered crypto mining. Despite this, Venezuela ranks among the top 20 countries for crypto adoption. In Argentina, chronic inflation has led to high crypto adoption rates, but regulatory steps to fully embrace cryptocurrencies are still pending. Kenya, on the other hand, is positioning itself as a potential Bitcoin mining hub through partnerships with industry leaders like Marathon Digital.
Smaller nations like Bhutan and El Salvador have quickly felt the impact of Bitcoin on their treasuries, whether through buying BTC or mining. El Salvador, in particular, announced that it no longer needs to acquire external debt, partially due to the role of Bitcoin. These examples demonstrate the potential for developing countries to leverage Bitcoin to improve their economies and reduce debt burdens.