Bhutan’s DHI to counterbalance the impact of halving through Bitcoin mining enhancement

The investment arm of the royal government of Bhutan, Druk Holding and Investments (DHI), and Bitdeer Technologies, a Nasdaq-listed Bitcoin mining partner, have announced plans to increase their BTC mining capacity in order to offset potential losses from the Bitcoin halving. The two companies will invest in expanding their mining project’s capacity sixfold before the halving event. Bitdeer’s chief business officer stated that the upgrades will raise Bhutan’s mining capacity by 500 megawatts by the first half of 2025, bringing the total capacity to 600 megawatts. The necessary funds for the upgrade will be taken from a $500 million fund established by the two entities. Last year, they announced the creation of a closed-end fund worth $500 million, with the aim of using Bhutan’s zero-emission energy to support blockchain technologies. The fund is also expected to help develop international stakeholder networks that can benefit Bhutan’s technology sector. It was revealed that DHI had quietly built a crypto portfolio worth millions of dollars, which was discovered during the bankruptcy proceedings of Celsius and BlockFi. Bhutan has been utilizing hydropower to mine BTC since 2019, when the price was at around $5,000. While some believe that the halving of BTC rewards may impact profitability, others argue that it will be compensated by an increase in network fees. Additionally, Bitcoin-based nonfungible tokens are seen as a potential solution to maintain miner profitability after the halving. Grayscale, a crypto asset manager, estimated that Bitcoin miners generated over $200 million in transaction fees as of February 2024.