The Himalayan country of Bhutan is set to significantly increase its Bitcoin mining capacity, aiming for a fivefold expansion in anticipation of the Bitcoin halving event scheduled for April.
Bloomberg reports that Bhutan’s national wealth fund, Druk Holding & Investments, is joining forces with the Bitcoin mining company Bitdeer to enhance its mining capability from 100 to 600 megawatts.
The nation has shown a keen institutional interest in Bitcoin, having started to acquire BTC when its value was around $5,000.
Bhutan Has Embraced Bitcoin More Fully Than Most Nations
Last year, Bhutan revealed its intention to secure $500 million in funding to increase its mining activities.
Presenting mining as a strategic economic initiative and a method to mitigate financial crises, Bhutan has adopted Bitcoin to a higher degree than many other countries. Its abundant renewable hydropower resources also make it an optimal site for sustainable mining practices.
This investment in state-of-the-art mining equipment comes just in time, as the Bitcoin network approaches its halving event in mid-April, a process that occurs every four years and reduces the mining reward by half, directly affecting miners’ earnings.
Source: bitinfocharts.com
The decision to expand mining operations is partly in response to the anticipated reduction in mining rewards. Bitdeer, known for its cost-effectiveness, boasts one of the industry’s lowest expenses for mining Bitcoin, at $20,000 per coin, which is significantly lower than the global average cost of up to $45,000.
Moreover, Bhutan views Bitcoin mining as an avenue to stimulate economic development and create job opportunities in rural areas.
Some Believe That The Halving Of BTC Rewards Would Not Affect Profitability
As businesses brace for possible financial impacts following the Bitcoin halving, there’s a contrasting optimism that the reduction in BTC mining rewards will not affect profitability.
Acheron Trading’s CEO, Laurent Benayoun, has expressed confidence that the decrease in mining rewards will be balanced out by a rise in network fees.
Similarly, Jimmy Zhao, a senior solution architect at BNB Chain, has pointed out the potential for Bitcoin-based non-fungible tokens (NFTs) to bolster miner earnings post-halving.
By February 2024, Grayscale, a cryptocurrency asset management firm, reported that Bitcoin Ordinals have contributed to generating over $200 million in transaction fees for miners, highlighting a lucrative avenue for offsetting the impacts of reduced mining rewards.
