Bhutan's DHI and Bitdeer Plan Major Bitcoin Mining Expansion Ahead of Halving
Summary:
Bhutan's Druk Holding and Investments (DHI) and Bitdeer Technologies plan to expand Bitcoin mining capacity to counterbalance the potential impact of reduced mining rewards after Bitcoin halving. They aim to boost the capacity of their mining project by six times. Upgrades will raise Bhutan's mining capacity by 500 megawatts by mid-2025, funded by a previously announced $500 million fund. As part of the partnership, DHI and Bitdeer also plan to use Bhutan's zero-emission energy to promote blockchain technologies. Meanwhile, industry experts believe that the halving of Bitcoin rewards might not impact mining profitability, suggesting it could be offset by an increase in network fees and potential assistance from Bitcoin-based NFTs.
Bhutan's official investment division, Druk Holding and Investments (DHI), in collaboration with the Bitcoin mining corporation Bitdeer Technologies, announced plans to expand their Bitcoin mining capacity. This increase aims to counterbalance the prospective effects from the reduction in mining rewards after the upcoming Bitcoin halving. The two partners are looking to invest in enhancing the productivity of their mining initiative by up to six times preceding the halving, according to reports.
Bitdeer’s primary business officer revealed that the proposed upgrades would enhance Bhutan's mining potential by 500 megawatts by mid-2025. This signifies an increase of the Himalayan nation's total mining capacity to 600 megawatts. The financial resources necessary for implementing new hardware for the upgrade will be sourced from the $500 million fund they announced previously.
In a statement dated May 3, 2023, the formation of a $500 million closed-end fund was revealed. Bitdeer's Chairman Jihan Wu stated then that their firm would join hands with DHI, utilizing Bhutan's zero-emission energy to promote blockchain technologies. Wu also indicated that the fund would pave the way for creating international stakeholder networks that could boost Bhutan's tech sector.
In other news, despite DHI's wide reach, managing over $2.9 billion in assets, its existing crypto portfolio only came to light in the course of the bankruptcy proceedings involving crypto companies Celsius and BlockFi. A report from Forbes shed light that DHI had invested millions in crypto and was a customer of both insolvent firms. Local sources also brought to light Bhutan's usage of hydroelectric power for mining Bitcoin since 2019 when prices were roughly at $5,000.
While both firms gear up to counterbalance potential setbacks post-Bitcoin halving, other stakeholders believe the halving of Bitcoin rewards might not influence profitability. Laurent Benayoun, CEO of liquidity firm Acheron Trading, stated that miners' rewards are likely to be balanced out by a rise in network fees. According to Jimmy Zhao, BNB Chain's senior solution architect, Bitcoin-based nonfungible tokens (NFTs) might also assist miner profitability after the Bitcoin halving. Furthermore, as of February 2024, cryptocurrency asset manager Grayscale estimated that Bitcoin Ordinals netted over $200 million in transaction fees for miners.
Published At
4/5/2024 4:33:25 PM
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