Bitcoin surged and then fell back. After rising above $93,000 yesterday, it quickly fell back by $5,000, and then quickly rose back to above $90,000. The latest price is $91,149 per coin. The biggest reason why the mainstream speculates that Bitcoin is expected to break through $200,000 is that it has entered a new narrative stage. After the positioning of digital gold is gradually recognized by mainstream financial institutions, Bitcoin is becoming an important asset category: a national strategic reserve asset.
On November 10, (Bitcoin) Magazine CEO David Bailey said on his social platform, "At least one sovereign nation is actively acquiring Bitcoin and has become one of the top five holders. I hope we will hear from them soon."
Currently, governments of sovereign states around the world, including China, the United States, and Russia, are involved in holding Bitcoin.
The United States: First, the U.S. government does hold a large amount of Bitcoin, and these assets mainly come from confiscation and seizure actions by law enforcement agencies. According to the latest data, the U.S. government holds an estimated 200,000 Bitcoins, and the value of these Bitcoins fluctuates with the market, currently about $5 billion to $12 billion.
Moreover, Trump stated at the Bitcoin Conference on July 28 that if elected in November, he would fire Gary Gensler, Chairman of the U.S. SEC, prevent the U.S. from selling its Bitcoin holdings, and establish a "strategic Bitcoin reserve."
Russia is involved in Bitcoin because the sanctions it has been subject to have limited its access to the global financial system. After being sanctioned by the United States, Russia began to actively explore alternatives to cross-border trade that bypass the SWIFT system, with Bitcoin becoming an important tool. In 2024, Russian President Vladimir Putin signed a law that officially legalized Bitcoin mining, emphasizing the use of Russia's abundant energy resources to support the Bitcoin mining industry, a move that could provide a stable source of Bitcoin for national reserves and trade needs.
These actions show that Russia is using Bitcoin and other digital assets as a means to deal with sanctions and enhance financial autonomy. According to Bloomberg Terminal information on October 23, as the BRICS summit opened in Kazan, Russia, the issue of cryptocurrency was put on the agenda. Russian lawmakers are promoting the idea that Russian miners can sell their tokens to international buyers, and domestic buyers can use BitMarket and other crypto markets to pay for imported goods, effectively bypassing Western sanctions.
China mainly involves Bitcoin at the judicial level. In many cases involving freezing and confiscation of virtual currency assets, law enforcement agencies have repeatedly conducted investigations into illegal funds and money laundering, including freezing and confiscation of Bitcoin. These confiscated Bitcoins were confiscated by the relevant departments. Although there has never been a public record, there are signs in some judicial cases that government departments need to hold encrypted assets under certain circumstances.
The first two countries to take the plunge were El Salvador and Bhutan.
El Salvador began purchasing Bitcoin in 2021. According to The Bitcoin Office in El Salvador, El Salvador is still purchasing 1 BTC per day. Its current Bitcoin holdings have reached 5,929.7 BTC, with a market value of approximately US$470 million.
Another mysterious sovereign state is Bhutan, located in the Himalayas. Its national investment institution, Druk Holdings, has been mining Bitcoin through hydropower resources since 2019. With a population of only 800,000, it owns more than 12,000 Bitcoins. This small country located in the southern foothills of the Himalayas has attracted global attention with its bold Bitcoin betting strategy.
With a holding scale of over $1.1 billion, Bhutan has been involved in Bitcoin mining for many years. It is rapidly accumulating wealth through Bitcoin mining business and becoming an important player in the crypto market. According to Arkham data, the Bhutanese government mines through multiple mining pools such as AntPool, Braiins and Foundry. As of November 13, the Royal Government of Bhutan holds 12,576 Bitcoins, worth over $1.1 billion. In terms of the known scale of government holdings, Bhutan is the fourth largest holder after the United States, China and the United Kingdom.
This holding is quite astonishing. If calculated based on Bhutan's GDP of $2.89 billion in 2022, the value of its Bitcoin holdings is more than one-third of the country's GDP. In contrast, for example, El Salvador (population 6.4 million) holds $500 million in Bitcoin, which accounts for less than 1.5% of its 2023 GDP of $34.02 billion.
Unlike most governments that obtain Bitcoin through asset seizure and other methods, Bhutan’s Bitcoin comes from its active participation in Bitcoin mining. As previously reported, Bhutan has one of the largest hydropower and water reserves in the world, creating a unique and significant advantage for its participation in Bitcoin mining. Bhutan is an "early entrant" and has been vigorously deploying Bitcoin mining for several years. Its government representative once revealed that Bhutan started mining Bitcoin "a few years ago as one of the early entrants when the price of Bitcoin was about US$5,000." currency.
In 2023, Bhutan's investment arm Druk Holding & Investments teamed up with listed mining company BitDeer to launch a $500 million crypto mining fund, with the goal of using Bhutan's abundant hydropower to build a zero-carbon crypto mining base. The construction of the mining data center is expected to be completed in the third quarter of 2024. Ujjwal Deep Dahal, CEO of Druk Holding & Investments, also explained that mining is the least risky way for Bhutan to participate in the crypto field, and the country will currently focus on Bitcoin mining.
The on-chain data also confirms this. Arkham tracking data shows that Bhutan has been involved in the crypto field since at least February 2021. At that time, Bhutan received its first Bitcoin from AntPool, which was 0.0267 BTC, worth about $1,280 at the time. This may also be Bhutan’s first foray into Bitcoin mining. Since then, Bhutan has begun to regularly transfer some Bitcoin to exchanges, especially since the second half of last year, when Bhutan deposited hundreds or even thousands of Bitcoins into trading platforms almost every month.
In addition to mining, Bhutan has also conducted large-scale financial transactions with multiple crypto platforms. According to public data, the total amount of crypto transactions between Bhutan and BlockFi, Celsius, Hodlnaut and other cryptocurrencies exceeded US$800 million, covering a variety of crypto assets such as Bitcoin, Ethereum and stablecoins.
