Bhutan Liquidates 70% of Bitcoin Reserves, Signals End to Sovereign Mining Experiment

Bhutan is quietly unwinding one of the most unique sovereign Bitcoin experiments in history. Recent on-chain data from Arkham Intelligence reveals the government transferred approximately 319.7 BTC, valued at $22.68 million, to various addresses on Thursday, including wallets linked to Galaxy Digital and OKX. This activity is part of a sustained liquidation trend. From a peak of roughly 13,000 BTC in October 2024, the kingdom's holdings have plummeted to 3,954 BTC—a 70% reduction in just 18 months. These assets were originally accumulated via a hydropower-backed mining operation managed by Druk Holding and Investments, the nation's sovereign wealth fund. Evidence suggests the mining operation itself may have stalled. No Bitcoin inflows exceeding $100,000 have been recorded for over a year, indicating the government may be spending down existing reserves without replacing them. This shift likely stems from compressed margins following the network halving, which reduced block rewards to 3.125 BTC, combined with all-time high network difficulty. Bhutan's exit stands in stark contrast to current institutional trends. While the kingdom sells, entities like MicroStrategy and U.S. spot ETFs continue to absorb massive quantities of BTC. Furthermore, the economics of renewable energy may now favor selling electricity directly to neighboring India rather than dedicating it to mining as hardware depreciates. The liquidation highlights the operational challenges sovereign states face when maintaining crypto positions during market drawdowns and increasing network competition, marking a pivot from narrative appeal to operational reality.