Nestled between giants India and China, Bhutan is transforming its economic strategy beyond its famous “Gross National Happiness” metric.
The tiny Buddhist kingdom, home to fewer than 800,000 people, has quietly positioned itself as one of the world’s largest sovereign holders of bitcoin while developing ambitious renewable energy projects to combat economic stagnation and reverse a troubling brain drain.
Leveraging Digital Assets And Hydropower
“Geography is a challenge for us, demography is a challenge for us,” acknowledges Ujjwal Deep Dahal, CEO of Druk Holdings and Investments (DHI), Bhutan’s sovereign wealth fund, in an interview with Fortune.
Despite these obstacles, the country is making strategic investments that leverage its natural advantages while embracing technological innovation.
With $3 billion in assets under management—a fraction of giants like Singapore’s $300 billion Temasek—DHI manages stakes in 24 companies critical to Bhutan’s economy, including the Bank of Bhutan and Bhutan Telecom.
What makes this small fund significant is its forward-thinking investment approach, particularly its substantial Bitcoin position initiated in 2019 when the cryptocurrency traded around $10,000—now worth approximately $104,000 as of May 2025.
“Bitcoin is a parallel to digital gold,” explains Dahal, framing the cryptocurrency as part of a diversification strategy for alternative investments. He notes that Bhutan’s Bitcoin mining operations are powered almost entirely by renewable energy, primarily hydropower, creating a sustainable model that “helps offset carbon emissions elsewhere.”
The country currently generates 2.5 gigawatts of hydroelectric power with an additional 3 gigawatts under construction—significant capacity for a nation of Bhutan’s size. This abundant clean energy represents both immediate economic value and future potential for energy-intensive industries like data centers.
From Brain Drain To Innovation
Bhutan faces serious economic challenges despite its spiritual wealth. Approximately 13,500 Bhutanese—1.6% of the entire population—emigrated to Australia alone in 2023, highlighting the severity of the country’s brain drain. Tourism, a traditional income source, remains below half of pre-pandemic levels, with 145,000 visitors in 2024 compared to 315,599 in 2019.
To counter these trends, Bhutan is developing the Gelephu Mindfulness City, a special administrative region spanning 2,500 square kilometers designed to be an economic corridor to South and Southeast Asia. This ambitious project aims to combine economic growth with sustainability and holistic living, creating space for healthcare, technology, and green energy businesses.
“We’re trying to bring an innovation strategy into DHI to build startups with global founders, academicians and innovators, and bring them together to build a startup culture and economy,” Dahal explains. The vision includes positioning Bhutan as a testbed for emerging green technologies like pump storage and hydrogen power.
For a country still largely covered in forest and historically isolated from global markets, Bhutan’s embrace of Bitcoin and renewable energy represents a fascinating blend of traditional values and forward-thinking economic strategy.
As the kingdom works to maintain its cultural identity while creating new opportunities for its citizens, its unconventional approach may offer lessons for other small nations seeking relevance in the global economy.