To counteract the possible effects of the mining incentives drop following the Bitcoin halving, Bitdeer Technologies, a mining partner of the Kingdom of Bhutan, and its sovereign investment arm, the Bhutanese government, will boost their capacity for mining BTC.
The investment arm of the Bhutanese royal government, Druk Holding and Investments (DHI), and Bitdeer, a company listed on the Nasdaq, reportedly declared that they will contribute to boosting the capacity of their mining project six times before the deadline.
Bitdeer’s chief business officer said the planned upgrades will raise Bhutan’s mining capacity by 500 megawatts by the first half of 2025. This would increase the Himalayan kingdom’s total mining capacity to 600 megawatts.
The $500 million fund that the two created last year would be used to provide new gear for the update. The two organizations declared on May 3, 2023, that a $500 million closed-end fund had been established.
At the time, Bitdeer chairman Jihan Wu said that his company would collaborate with DHI to utilize Bhutan’s zero-emission electricity for blockchain technology support. According to Wu, the fund will support the creation of global stakeholder networks that could benefit Bhutan’s technology industry.
Before it was revealed in the bankruptcy cases of cryptocurrency companies Celsius and BlockFi, Bhutan’s DHI, which oversees more than $2.9 billion in assets, had subtly developed a cryptocurrency portfolio.
According to a Forbes story, the DHI was a customer of the two insolvent companies and had invested millions in cryptocurrency.
According to local reports, Bhutan has been mining Bitcoin using hydropower since 2019, when the price was approximately $5,000.
Although the two businesses are getting ready to make up for any losses that might result from the halving of Bitcoin incentives, some others think that profitability would not be impacted.
The mining rewards will be “compensated by an increase in network fees,” according to Laurent Benayoun, CEO of liquidity business Acheron Trading.
After the Bitcoin halving, Jimmy Zhao, senior solution architect at BNB Chain, thinks that nonfungible tokens based on the cryptocurrency could also boost miner profitability.
Crypto asset management Grayscale calculated that Bitcoin Ordinals brought in over $200 million in transaction fees for miners as of February 2024.