Bhutan’s government has started moving its quietly accumulated Bitcoin holdings as the price soared above the key $70,000 level.
The Bhutan government-labeled wallet transferred over $66 million worth of Bitcoin (BTC) to the Binance deposit wallet, suggesting that it intends to sell the BTC on the world’s largest cryptocurrency exchange.
The $66.5 million was transferred in two transactions on Oct. 29, according to Arkham Intelligence data.
Bhutan government-labeled wallet outflows. Source: Arkham Intelligence
The government wallet began selling shortly after Bitcoin surpassed $70,000 for the first time since June 10. Significant price levels like $70,000 can lead to volatility, including profit-taking from large Bitcoin holders, known as whales, which can impact the price of Bitcoin.
BTC/USD, 1-month chart. Source: Cointelegraph
The Bhutan government’s wallet still holds approximately $886 million worth of Bitcoin, which could create further selling pressure for the cryptocurrency, as the wallet has been mining and holding Bitcoin for over five years.
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Bitcoin mining funded a 50% salary increase for public servants in Bhutan
Bitcoin mining has become a significant part of Bhutan’s economy, with its Bitcoin reserves accounting for over 26.9% of its $2.9 billion gross domestic product (GDP) in 2023, according to World Bank data.
In 2023, Bitcoin mining revenue from Bhutan’s Druk Holding and Investments was used to fund a 50% salary increase for public servants in the country, according to local media reports.
As of September, Bhutan held twice as much Bitcoin as El Salvador, which adopted Bitcoin over three years ago and has netted $31 million in profit since making BTC legal tender.
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US elections and China’s $1.4 trillion debt plan are fueling Bitcoin’s rally
Bitcoin price has been in an uptrend bolstered by an array of macroeconomic factors.
BTC/USD, 1-month chart. Source: Cointelegraph
China’s plan to potentially raise $1.4 trillion worth of fresh debt could pose a “great buying opportunity” for Bitcoin, according to BitMEX co-founder Arthur Hayes.
Bitfinex analysts also see China’s potential economic stimulus as a demand driver for Bitcoin price. The analysts told Cointelegraph:
“Historically, large liquidity infusions can lift risk assets as seen in 2020 U.S. COVID-19 Stimulus. Following significant COVID-19 relief packages, including direct payments and expanded unemployment benefits, Bitcoin saw a strong upward trend. Increased money supply and fears of inflation led investors to seek alternatives to cash.”
Bitcoin price rallied over 400% from March 2020 to early 2021, the analysts added.
BTC/USD, 1-week chart, March 2020. Source: TradingView
However, the $1.4 trillion policy is unlikely to boost prices in the short term, the analysts added:
“Over the longer term, should China’s stimulus stabilize its economy and possibly boost global liquidity, Bitcoin could see increased buying as a hedge against inflation and currency risks across global markets… Liquidity injections such as this will continue to fuel risk assets in general and Bitcoin in particular.”
The Bitcoin price was also bolstered by growing anticipation for the United States presidential election on Nov. 5.
A victory by former President Donald Trump is widely seen as a bullish development for risk assets like Bitcoin, which is correlated with Trump’s rising election odds.
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This is a developing story, and further information will be added as it becomes available.
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