Recently, I noticed a rather interesting market phenomenon—Bhutan, once a testing ground for Bitcoin mining, is quietly liquidating its cryptocurrency assets.

According to on-chain data, this Himalayan small country has sold off about 70% of its Bitcoin holdings over the past 18 months. By October 2024, Bhutan still held around 13,000 Bitcoins, but now it has less than 4,000, worth approximately $280 million. In the past week, the Bhutanese royal government transferred about 320 Bitcoins to exchange wallets, continuing to unload.

The story behind this is quite worth pondering. Bhutan was originally a very unique experiment—a small nation rich in hydropower, mining Bitcoin with cheap clean energy, accumulating a substantial amount of crypto assets. This was seen as an innovative attempt at sovereign wealth management. But now, it seems the ending of this story might not be so romantic.

A detail worth noting is that Bhutan’s mining operations appear to have come to a halt. On-chain data shows that there have been no large inflows of Bitcoin over the past year, and the mining income has completely dried up. This means Bhutan is now just consuming its accumulated stock, with no new supply to replenish it.

The economic calculations are straightforward. When Bitcoin prices are above $90k and mining difficulty is relatively low, Bhutan’s operations still had profit margins. But now, with Bitcoin around $81k, network difficulty at an all-time high, and block rewards halved to 3.125 BTC, these changes have sharply squeezed profit margins for small-scale, national-level mining.

More critically, Bhutan’s valuable hydropower resources might now be more profitable selling electricity to neighboring India than mining Bitcoin. As difficulty continues to adjust, mining machines are also depreciating, and the long-term appeal of holding crypto diminishes.

This creates an interesting contrast. While Bhutan is liquidating, other major crypto holders are taking the opposite approach—Strategy spent $330 million last week to buy 4,871 Bitcoins, the US spot ETF continues to accumulate, and the Ethereum Foundation is increasing its holdings. Bhutan has become the only significant sovereign-level player actively liquidating, which somewhat reflects the harsh reality small countries face when holding crypto assets long-term.

So far, Bhutan’s remaining Bitcoin holdings are less than what Strategy typically purchases in a week. The 13,000 Bitcoins once mined from their mountains are now surpassed by the amount a Virginia-based company can accumulate in just a few days. This data point vividly illustrates how the scale of national experiments in crypto has shifted dramatically compared to individual investment firms.

Bhutan’s story reminds us that, no matter how compelling the narrative of Bitcoin as an asset class, practical economic pressures still force compromises. That’s why on platforms like Gate, we see institutional investors and individuals adjusting their strategies based on market realities, rather than blindly adhering to idealized holding philosophies.