Bhutan’s Secretive Crypto Investments Raise Concerns Over Environmental Impact
A former international advisor has revealed that Bhutan’s government has invested heavily in a secretive cryptocurrency mining operation, sparking concerns over the environmental impact of such a venture.
A Staggering Investment
According to sources, Bhutan’s government had considered partnering with other miners beyond Bitdeer, and consultants who advised on its mining strategy prior to Bitdeer’s announcement told Forbes that Bhutan had previously expressed interest in building a 100 MW hydro-powered operation.
The scale of Bhutan’s investment is staggering, with customs data showing that millions of dollars’ worth of computer chips were imported into the country in 2021 and 2022. The cost of these chips would be equivalent to a data center the size of several football fields, even at 2021’s sky-high prices.
Environmental Concerns
Industry insiders have raised concerns over the environmental impact of such a large-scale mining operation, particularly given Bhutan’s hydropower capacity and its reliance on cheap energy. Analysts warn that the country’s rivers dwindle in the winter dry season, making it necessary to import energy from India during those periods, which could lead to significant losses for miners.
- “This cheap, stranded hydropower is undoubtedly alluring for miners whose sole job is turning undervalued electricity into bitcoin,” said Jaran Mellerud, a bitcoin mining analyst with Luxor. “But the risks are high, and the environmental impact of such an operation could be devastating.”
- The Bhutanese government’s reliance on cheap energy and its limited resources raises questions about the sustainability of such a venture.
Government Silence
The Bhutanese government has been tight-lipped about its cryptocurrency investments, with Druk Holdings & Investment’s CEO Ujjwal Deep Dahal only stating that revenues from its bitcoin mining operation meant it had not lost money on its digital asset investments.
A Brief History of Crypto Investments in Bhutan
Bhutan’s interest in the blockchain dates back to 2021, when it piloted a central bank digital currency with Ripple. However, its crypto investments have largely remained a secret, even when they involved entanglements with failed companies like BlockFi and Celsius.
Growing Concerns
As Bhutan continues to invest heavily in cryptocurrency mining, concerns over the environmental impact of such operations are growing louder. With the country’s reliance on cheap energy and its limited resources, it remains unclear whether such a venture is sustainable or responsible.