According to Bloomberg, Bhutan's investment arm, DHI, and Bitdeer, a Singapore-based company, have announced plans to increase the Himalayan kingdom's Bitcoin mining capacity by 500 megawatts by the first half of 2025. The capital for this expansion will be sourced from a $500 million fund that the two entities began raising in May last year. The fund was established with the aim of leveraging Bhutan's abundant hydroelectric power for Bitcoin mining.
Bitdeer's CEO, Kong, anticipates the fund will be closed by July. Bitcoin miners use power-intensive computers to secure the blockchain, earning new tokens as a reward. These rewards are programmed to be halved every four years, a process designed to cap the total supply of the original cryptocurrency at 21 million coins. The upcoming halving in April will see mining rewards reduced from 6.25 to 3.125 coins per block. Despite this, DHI and Bitdeer are confident they can maintain operational efficiency even if the price of Bitcoin declines post-halving. Bitdeer boasts one of the industry's lowest costs per Bitcoin mined, at $20,000 per coin.
The crypto sector faced a significant challenge in 2022 when soaring energy costs and Bitcoin's price falling below $16,000 led to some miners going bankrupt. The rising costs of Bitcoin computing are due to an increase in Bitcoin's mining difficulty, a measure of the computing power required to add a new block to the network. This difficulty has reached record highs ahead of the halving, offsetting some of the gains from the price rally.
Bhutan, located between China and India, has been seeking ways to diversify its hydropower-dependent economy. DHI, which manages the government's diverse investments, views blockchain technology as a crucial component in building an 'innovation ecosystem for a startup economy.' The investment arm has been exploring asset tokenization and is also developing 'Bhutanverse,' a metaverse project.