On the global financial stage, Bitcoin is no longer just a “toy” for investors, but is gradually becoming part of national strategy. In May 2025, a chart titled “Countries Holding Bitcoin” circulated online, revealing the holdings of Bitcoin by various countries: the United States leads with 207,189 coins, worth nearly $2.2 billion; China closely follows with 194,000 coins; small countries like Bhutan and El Salvador also made the list, holding 13,029 and 6,089 coins respectively. In total, 529,705 Bitcoins are held by governments around the world, accounting for 2.522% of the total Bitcoin supply. However, one name absent from the chart has sparked recent discussions — Pakistan. This South Asian country announced the establishment of a national-level Bitcoin strategic reserve and pledged to “never sell.” This move not only places Pakistan at the forefront of cryptocurrency but also raises the question: why are more and more small countries so eager to embrace Bitcoin?

Pakistan’s Bitcoin Ambitions: From Energy to National Reserves

Pakistan’s Bitcoin strategy has been launched amidst much fanfare. In May 2025, at the “Bitcoin 2025” conference held in Las Vegas, USA, Bilal Bin Saqib, Special Assistant to the Prime Minister and Advisor on Blockchain and Cryptocurrency Affairs, announced that Pakistan will establish a national-level Bitcoin strategic reserve, following the example of the United States by holding these assets long-term. The inspiration for this plan is clearly visible: the U.S. government holds 207,189 Bitcoins, valued at approximately $2.196 billion, accounting for 0.987% of the total Bitcoin supply, becoming a benchmark for many countries. Although the specific scale of Pakistan’s holdings has not yet been made public, its ambitions are already evident.

Pakistan’s Bitcoin strategy goes beyond just reserves. The government has also announced the allocation of 2000 megawatts of surplus electricity for Bitcoin mining and artificial intelligence data centers. This initiative directly addresses the country’s energy pain points: coal-fired power projects like Sahiwal and Qasim Port are currently operating at only 15% capacity, leading to significant power waste. Through mining, Pakistan hopes to convert this “idle energy” into economic value. Based on the current Bitcoin price (around $106,000 per coin), each mined Bitcoin could bring substantial revenue to the country. More importantly, this plan has also attracted the attention of foreign investors, with the government enticing several mining company delegations through tax incentives.

At the same time, Pakistan’s digital asset management framework is also accelerating its improvement. On May 22, 2025, the Pakistan Digital Asset Authority (PDAA) was officially established, responsible for regulating cryptocurrency trading, DeFi applications, and asset tokenization, as well as promoting the application of blockchain technology in government affairs, land records, and the financial sector. The establishment of the PDAA was proposed by the Pakistan Cryptocurrency Committee, with advisors including former Binance CEO Zhao Changpeng, injecting international experience into policy-making. The PDAA is also tasked with promoting the tokenization of national debt and supporting Web3 startups, attempting to make Pakistan a crypto hub in South Asia.

The cryptocurrency user base in Pakistan is also impressive. It is expected that by 2025, the number of cryptocurrency users in the country will exceed 27 million, accounting for over 10% of the total population (247 million). This figure not only reflects the enthusiasm of the young population for digital assets but also provides public support for the government to promote a crypto economy. From energy to policy, and to the user base, Pakistan’s Bitcoin strategy is advancing in multiple dimensions.

The Bitcoin Craze of Small Nations: From Bhutan to El Salvador

Pakistan is not an isolated case. Looking globally, small countries have been actively exploring the Bitcoin sector. Bhutan, a small nation at the foot of the Himalayas, has become an “invisible player” in Bitcoin mining thanks to its abundant hydropower resources. According to the latest data, Bhutan holds 13,029 Bitcoins, valued at approximately $138 million, accounting for 0.062% of the total supply. These Bitcoins have been accumulated through mining by the state-owned enterprise Druk Holdings, and the low cost of hydropower gives Bhutan a competitive edge in mining.

El Salvador is the pioneer of the small country’s Bitcoin strategy. In 2021, this Central American nation became the first in the world to adopt Bitcoin as legal tender and has continued to increase its reserves. As of May 2025, El Salvador holds 6,089 Bitcoins, worth approximately $64.53 million, accounting for 0.029% of the total supply. Its unrealized profits from Bitcoin reserves have reached $357 million, demonstrating the returns brought by price increases. However, El Salvador’s Bitcoin journey has not been smooth. The International Monetary Fund (IMF) reached a $1.4 billion loan agreement with it in December 2024, but demanded that the existing reserve size remain unchanged and that the “Bitcoin Law” be amended to remove the requirement for the private sector to accept Bitcoin. The IMF’s cautious stance reflects another side of Bitcoin: it is both an opportunity and a potential financial risk.

Ukraine’s Bitcoin holdings bear the marks of war. During the Russia-Ukraine conflict, Ukraine raised over $100 million through cryptocurrency donations, becoming an important source for its 46,351 Bitcoins (worth approximately $491 million). Ukraine’s crypto policy is relatively open, attracting a large number of Web3 startups, with its Bitcoin holdings accounting for 0.221% of the total, ranking among the top for small countries.

In contrast, the 66 Bitcoins (worth about $6.99 million) in Georgia seem insignificant, possibly a symbolic holding of early confiscated assets, and a clear national strategy has yet to be formed.

Why are small countries keen on Bitcoin? The intertwining of economics and geopolitics

Behind small countries embracing Bitcoin is the intertwining of multiple factors including economic, geopolitical, and technological aspects. First, Bitcoin is seen as a tool for hedging against economic difficulties. Many small countries face pressures from insufficient foreign exchange reserves, inflation, or high levels of debt. For example, El Salvador’s public debt accounts for more than 90% of its GDP, and Pakistan similarly bears a heavy debt burden. The volatility of traditional financial markets — such as falling stock prices and low bond yields — has led these countries to seek Bitcoin as an alternative asset. Its decentralized nature makes it immune to the constraints of a single country’s monetary policy, especially under a dollar-dominated financial system, Bitcoin offers small countries a potential way to enhance their economic autonomy.

Secondly, energy utilization is a direct driving force behind the Bitcoin strategy of small countries. Bhutan’s hydropower mining and Pakistan’s 2000 megawatt power distribution plan are similar. Many small countries have underutilized renewable energy or surplus electricity, and Bitcoin mining can not only monetize these resources but also attract international mining companies and technology firms. If Pakistan’s coal-fired projects can achieve full-load operation through mining, it could not only reduce electricity waste but also potentially bring significant foreign exchange income to the country.

Furthermore, Bitcoin policy has become a “magnet” for attracting foreign investment. In the global Web3 and blockchain boom, small countries are attracting startups and capital inflow through lenient crypto policies. Ukraine’s crypto ecosystem has nurtured several Web3 startups, and Pakistan’s PDAA also aims to support startups as a goal. This strategy not only brings direct investment but also promotes technology transfer and job growth.

Finally, geopolitical considerations play an important role in the Bitcoin strategy of small countries. In the dollar-dominated international financial system, small countries often find themselves in a passive position. The decentralized nature of Bitcoin makes it a potential “financial weapon,” helping small countries to gain more voice in the global game. Pakistan has explicitly stated that its Bitcoin strategy is inspired by the U.S. reserve plan, and the Bitcoin reserve policy promoted by the Trump administration in 2025 further encourages other countries to follow suit.

Comparison of Large and Small Countries: From Seizure to Strategic Holding

Unlike small countries, the Bitcoin held by large countries mostly comes from law enforcement seizures. The 207,189 Bitcoins held by the United States primarily originate from assets seized by the FBI in the Silk Road case; the 194,000 Bitcoins held by China also come from illegal asset seizures; the 61,000 Bitcoins held by the United Kingdom are similarly the result of law enforcement actions. The Bitcoin holdings of these large countries resemble more of an “unexpected gain” rather than a proactive strategy.

Small countries tend to accumulate Bitcoin through mining or policy purchases. Bhutan’s 13,029 Bitcoins come from hydropower mining, while El Salvador’s 6,089 Bitcoins are a product of national strategy. Ukraine’s 46,351 Bitcoins, although partially from donations, also reflect its proactive embrace of cryptocurrency policies. Although the proportion of Bitcoin holdings in small countries is low (totaling 2.522%), their strategic significance is greater, aiming to achieve economic diversification or hedge risks through Bitcoin.

It is worth noting that Germany cleared its Bitcoin reserves (approximately 50,000 coins) in 2024 to repay debts. This move stands in stark contrast to the long-term holding strategy of smaller countries and also reflects the divergence in Bitcoin policies among major powers.

The IMF’s scrutiny and the persistence of small countries

The road for small countries to embrace Bitcoin is not smooth, as the scrutiny of the International Monetary Fund (IMF) is always present. The case of El Salvador is the most representative. In December 2024, the IMF reached a $1.4 billion loan agreement with El Salvador, but required it to maintain the current level of Bitcoin reserves and amend the Bitcoin Law to remove the mandate for the private sector to accept Bitcoin. The IMF warned that Bitcoin reserves could exacerbate El Salvador’s debt risk. Nevertheless, El Salvador has shown strong performance in economic reforms and secured the next $120 million loan from the IMF.

Pakistan’s situation is more forward-looking. Its Digital Asset Management Agency (PDAA) emphasized compliance with the regulatory standards of the FATF (Financial Action Task Force) from the outset, attempting to gain policy space under the scrutiny of the IMF. Pakistan’s crypto policy is not limited to Bitcoin reserves but also includes the extensive application of blockchain technology in government affairs and the financial sector, which may provide greater flexibility in negotiations with the IMF due to this “comprehensive layout.”

The IMF’s cautious stance reflects the dual nature of Bitcoin: it is both an opportunity for small countries to transform their economies and a potential threat to financial stability. As small countries embrace Bitcoin, they must find a balance between innovation and compliance.

Pakistan’s Unique Advantages and Challenges

Compared to other small countries, Pakistan’s Bitcoin strategy has its uniqueness. First, its demographic dividend and cryptocurrency user base provide it with vast market potential. With 27 million cryptocurrency users, they are not only a consumer group but also a driving force for blockchain technology innovation. Secondly, Pakistan’s energy resources and geographical location make it a potential cryptocurrency hub in South Asia. The 2000 megawatt power distribution plan not only absorbs excess energy but may also attract investment from mining companies in the Middle East and China.

However, the challenges are equally significant. Pakistan’s aging power infrastructure and coal-fired projects may face environmental pressures. Additionally, the volatility of the cryptocurrency market could pose a threat to its reserve value. Although El Salvador’s Bitcoin reserves have made a profit of $357 million, they have also undergone severe price fluctuations. More importantly, Pakistan needs to cautiously advance its policies under the IMF’s regulatory framework to avoid restrictive loan conditions.

Conclusion: The Bitcoin Gamble of Small Countries

Pakistan’s Bitcoin strategy is a microcosm of how small countries are embracing the digital economy. From Bhutan’s hydropower mining to El Salvador’s fiat experiment, and Ukraine’s wartime donations, these nations see hope for economic revival in the wave of Bitcoin. Bitcoin is not just an asset; it is also a nexus of energy, technology, and geopolitics. Small countries are using Bitcoin in an attempt to find their place in the global financial system.

However, this gamble is not without risks. The volatility of Bitcoin, the regulatory pressures from the IMF, and the limitations of infrastructure could thwart the ambitions of small nations. But as Bilal Bin Saqib said at the “Bitcoin 2025” conference: “Once misunderstood, now unstoppable.” For Pakistan and countless small nations, Bitcoin is not just an asset, but a belief — they do not wish to be absent in the future of the digital economy.

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