The investment arm of the Kingdom of Bhutan, Druk Holding and Investments (DHI), and its Bitcoin mining partner, Bitdeer Technologies, have announced plans to increase their BTC mining capacity in order to counter the potential impact of the upcoming Bitcoin halving. According to reports, the two entities will invest in expanding their mining project’s capacity sixfold before the halving takes place. This move is aimed at offsetting the reduction in mining rewards that typically occurs after a halving event.
Bitdeer’s chief business officer stated that these planned upgrades will raise Bhutan’s mining capacity to 500 megawatts by the first half of 2025, effectively increasing the country’s total mining capacity to 600 megawatts. The necessary funds for this expansion will be sourced from a $500 million fund that DHI and Bitdeer announced last year. This fund was established on May 3, 2023, and marked the creation of a closed-end fund valued at $500 million.
During the announcement of the fund, Bitdeer’s chairman, Jihan Wu, expressed the intention to leverage Bhutan’s zero-emission energy to support blockchain technologies. Wu also emphasized that the fund would aid in the development of international stakeholder networks that could benefit Bhutan’s technology sector.
It has been revealed that DHI, which manages assets worth over $2.9 billion, had quietly built up a crypto portfolio, which came to light during the bankruptcy proceedings of Celsius and BlockFi, two crypto firms. Reports indicate that the DHI had invested millions in crypto and was a customer of the bankrupt companies.
Furthermore, it has been reported that Bhutan has been utilizing hydropower for BTC mining since 2019, when the price of Bitcoin was around $5,000. This renewable energy source has allowed Bhutan to engage in mining activities more sustainably.
While DHI and Bitdeer are preparing for the potential losses associated with the Bitcoin halving, some experts believe that the halving will not significantly impact profitability. Laurent Benayoun, the CEO of liquidity firm Acheron Trading, argues that any reduction in mining rewards will be compensated by an increase in network fees. Additionally, Jimmy Zhao, the senior solution architect at BNB Chain, suggests that Bitcoin-based nonfungible tokens could also contribute to miner profitability after the halving. In fact, Grayscale, a crypto asset manager, estimated that Bitcoin miners generated over $200 million in transaction fees as of February 2024.
In other news, Bitcoin has reached new all-time highs, the SEC has delayed its decision on Bitcoin options, and a stablecoin bill is looming.
Bhutan's DHI to counterbalance reduction impact through Bitcoin mining enhancement