Bhutan's Bitcoin Bet: Sovereign Fund Sells $22.4M as Crypto Holdings Tumble from Peak

The Royal Government of Bhutan has transferred approximately $22.4 million in Bitcoin from its sovereign wallets this week, with one transaction routed directly to institutional market maker QCP Capital. The moves come as the nation's cryptocurrency portfolio, once valued at a peak of $1.4 billion, now stands at an estimated $412 million—a stark decline that underscores the volatility facing state-backed digital asset strategies.

Blockchain analytics firm Arkham Intelligence confirmed the outflows, which originated from wallets associated with Druk Holding & Investments (DHI), Bhutan's sovereign investment arm. The sales consisted of two primary transactions: 184.03 BTC ($14.09 million) and, five days prior, 100.82 BTC ($8.31 million) sent to an address linked to Singapore-based QCP Capital.

Analysis of historical data reveals that Bhutan has typically executed sales in tranches of around $50 million, with particularly heavy activity in the latter half of September 2025. The recent $22.4 million outflow is notably smaller, potentially indicating a more measured approach to liquidation or simply diminished reserves.

The choice of counterparty is telling. By dealing directly with a market maker like QCP Capital, Bhutan can facilitate large block trades with minimal market disruption—a tactic that suggests strategic treasury management rather than forced, distressed selling. This method allows sovereign entities to exit positions without the price impact often associated with direct exchange deposits.

Bhutan's foray into Bitcoin began in 2019, leveraging its abundant hydroelectric power to launch a state-backed mining operation through DHI. Arkham estimates the venture generated over $765 million in profits against energy costs of roughly $120 million, a favorable margin enabled by cheap, renewable power.

However, the landscape shifted dramatically after the April 2024 Bitcoin halving, which effectively doubled the cost to mine each coin. Data indicates Bhutan scaled back mining operations significantly post-halving, pivoting from accumulation to monetization of its existing reserves—a reflection of broader industry pressures on profitability.

The portfolio's steep decline from its peak is attributed to both deliberate sales and broader market depreciation. Bhutan's peak holdings coincided with Bitcoin's price highs, magnifying the percentage drop as markets corrected through 2025 and into early 2026. The fund's remaining assets are predominantly held in Bitcoin (approximately 5,700 BTC), with minimal exposure to other cryptocurrencies.

Transaction history shows Binance and Celsius Network have been DHI's primary exchange partners, handling 68% and 31% of transferred value, respectively. This activity, combined with direct market-maker deals, paints a picture of a sophisticated, albeit now contracting, sovereign crypto strategy.

As one of the few nations to directly integrate cryptocurrency into its sovereign treasury, Bhutan's actions are closely watched. Whether the continued sales signal a gradual exit from digital assets or a routine rebalancing within a broader diversification strategy remains an open question for market observers.

— Reporting based on data from Arkham Intelligence and public blockchain records.

Voices from the Market

Anita Sharma, Sovereign Wealth Analyst at Frontier Advisors: "This is a pragmatic adjustment, not a panic exit. Using an OTC desk like QCP shows they're managing the unwind thoughtfully to protect remaining value. It's a case study in sovereign risk management."

Marcus Thorne, Founder of Digital Treasury Insights: "The 70% drop is alarming on paper, but context is key. They captured massive early profits. This looks less like a failure and more like a strategic harvest after a paradigm shift in mining economics."

David Kellerman, outspoken crypto skeptic and economist: "It's a spectacular, taxpayer-funded lesson in chasing hype. A nation betting its reserves on a volatile speculative asset? The 'hydro profit' narrative is a distraction from the core folly. They're now selling at a massive loss from the peak—this is damage control, not strategy."

Luna Chen, PhD Candidate in Sustainable Finance: "The environmental angle is still their unique advantage. Even if mining scaled back, proving a renewable-energy model for digital asset acquisition remains a significant contribution. The question is whether they'll reinvest those harvested gains into other sustainable tech."