Bhutan plans a $500 million fund for crypto mining in the Himalayas

Thimphu: Bhutan’s investment arm and Nasdaq-listed company Bitdeer Technologies Group plan to seek investors for a fund worth up to $500 million that will be used to develop green crypto mining in the Himalayan kingdom.

Fund raising targeting institutional investors will begin at the end of May and the goal is to set up carbon-free digital mining that taps Bhutan’s abundant hydroelectric power, according to a joint statement Wednesday.

Mining is the least risky way for Bhutan to tap crypto opportunities and for now the nation will focus on Bitcoin, Ujjwal Deep Dahal, the CEO of the investment arm, Druk Holding & Investments, said in an interview.

“It’s important for us to look at assets that are low volume, high value, or digital assets for that matter, and try to position ourselves in a way that we can be competitive globally over time to build our economy,” Dahal said.

Economic strategy

Forest-laden Bhutan, sandwiched between China and India, has a population of about 777,000 and has long sought to diversify an economy reliant on hydropower revenues. Druk manages the government’s investments in traditional areas like stocks, bonds, technology, energy and real estate but also crypto mining and investment under what it calls a “future-facing” strategy.

Bitcoin miners race to solve complex mathematical puzzles using energy-hungry computing rigs, earning new supply of the token in return. That’s led to criticism of the environmental fallout when dirty fuels supply the power.

Miners were squeezed by a crash in digital-asset prices, rising energy costs and increased competition last year. Conditions have improved in 2023 amid a rebound in the crypto market.

Singapore-based Bitdeer, owned by Chinese entrepreneur Jihan Wu, is one of the top crypto miners by computer power and has one of the largest centers in Texas. The firm began trading on the Nasdaq last month after a long-delayed merger with a special purpose acquisition company finally closed.

Construction timetable

Bitdeer expects to set up a 100-megawatt operation in Bhutan, with construction slated to start in the second quarter and be completed in July through September, a regulatory filing shows.

The company and Druk will also invest in the planned new fund, Bitdeer’s CEO Matt Linghui Kong said in an interview.

Druk ventured into crypto mining under a “sandbox” approach when Bitcoin was at about $5,000, Dahal said. It also had some investments with the now bankrupt US digital-asset lenders BlockFi and Celsius Network but they were a small part of Druk’s portfolio and have been “settled,” Dahal added.

Bitcoin surged to a record high of almost $69,000 in a pandemic-era crypto boom that peaked in 2021. The largest digital asset then sank below $16,000 in 2022 but has since rebounded to about $28,500.

Bhutan’s foray into the volatile and sometimes scandalous world of crypto is notable given that the nation is famed for using a “Gross National Happiness” index to gauge economic success. The gauge takes into account elements such as psychological wellbeing and ecological diversity to measure the standard of living.