Bhutan’s green energy pivot and the liquid Bitcoin treasury

Expanding the hydropower portfolio

The Dorjilung Hydroelectric Power Project on the Kurichhu River generates 1,125 MW and produces 4,500 GWh of clean electricity annually. This investment increases the national GDP by 2.4 percent. Druk Green Power Corporation owns 60 percent of the Dorjilung Hydro Power Limited entity, while Tata Power holds 40 percent. The partnership between Tata Power and Druk Green Power Corporation now includes a portfolio of 5,033 MW after the addition of the 404 MW Nyera Amari I & II Integrated Hydropower Project. This expansion follows the original agreement to develop 4,500 MW of projects. The current energy plan targets 25,000 MW of generation capacity by 2040. This project displaces 3.3 million tons of CO2 annually. It closes the seasonal energy gap during winter months and provides surplus power for export to India. Nearly 80 percent of the annual generation goes to India to meet rising peak demand. The $1.7 billion project uses a financing model involving $300 million in IDA financing, $215 million in IBRD financing, and up to $300 million from the IFC. This structure aims to catalyze an additional $900 million in private sector financing and limits direct credit exposure to $150 million. Over the 30-year IDA credit period, the project could earn $4 billion in revenues through taxes, free power, and equity dividends.

The shrinking Bitcoin reserves

Bhutan’s Bitcoin reserves fell 70 percent from the 13,000 BTC peak in late 2024 to 3,119 BTC in 2026. The country offloaded $230.39 million in Bitcoin since January 2026, which averages $50 million in monthly sales. In March 2026, transactions totaling 700 BTC, worth $50 million, came from DHI-linked wallets. One March transfer sent 325 BTC to a wallet associated with Galaxy Digital, while another sent 375 BTC to an unidentified address. On May 12, 2026, the government moved 100 BTC worth $8.1 million from sovereign wallets. This liquidity strategy uses mining gains to fund national development. The remaining 3,119 BTC holds a value of $252.3 million. If the government continues selling at $50 million per month, the reserves will not cover the 10,000 BTC pledge for the Gelephu Mindfulness City. The December 2025 pledge required 10,000 BTC, then worth $1 billion, for the special administrative region. This region covers 2,500 square kilometers, making it three times the size of Singapore. Analysts at Arkham Intelligence noted that the movement from older address formats to newer SegWit-style "bc1q" addresses might not indicate an immediate sale. However, the total outflows since the start of 2026 exceed $230 million.

Using cryptocurrency for national stability

The government uses Bitcoin mining revenue to stabilize the economy. Druk Holding and Investments manages these mining operations. In 2023, the government used $100 million from cryptocurrency sales to double civil servant salaries. This strategy helps combat the 19 percent youth unemployment rate recorded in 2024. You already know that small economies struggle with scale, but Bhutan uses surplus hydroelectric power to turn electrons into liquid digital assets. The Gelephu Mindfulness City functions as an urban growth engine that uses these funds to build sustainable businesses. The city features low-rise buildings, residential zones, a national park, and a wildlife sanctuary. It operates under an autonomous administrative system modeled on Singapore and Abu Dhabi. Tourism contributed $334 million to the GDP in 2023, but arrivals fell to 145,000 in 2024. By 2025, 66,000 Bhutanese citizens lived abroad, which increased the need for well-paid local jobs. This migration follows a period where 10.1 percent of the population lived below $8.3 per day PPP. The workforce remains 80 percent informal. The tourism industry employs 30,000 workers.

Managing energy and digital asset risks

The volatility of Bitcoin creates budgeting risks for the state. The 27.9 percent of GDP represented by the $750 million Bitcoin holdings remains sensitive to market shifts. Mining inflows at the DHI and Bitdeer facility have not exceeded $100,000 per day for over a year. The 600 MW mining farm expected by 2026 relies on the continued availability of surplus power. The first 100 MW facility began in September and hosts 30,000 mining machines. The government strategy is an audacious gamble on the continuation of the cryptocurrency boom. How will the state meet its 10,000 BTC commitment if the remaining 3,119 BTC vanishes at current rates? The strategy provides a way to monetize energy, but the declining Bitcoin reserves create a significant risk for national development projects.