Druk Holding and Investments (DHI), Bhutan’s sovereign investment arm, along with Bitdeer Technologies, a company listed on Nasdaq, have revealed their plans to increase their Bitcoin mining operations.

The goal of this expansion is to mitigate the potential impact of the upcoming Bitcoin halving event, which could reduce mining rewards.

The proposed upgrades are set to enhance Bhutan's mining capacity by 500 megawatts by the first half of 2025, raising the kingdom's total capacity to 600 megawatts. The required funds for this expansion will be sourced from a $500 million fund that was established by DHI and Bitdeer last year.

Bitdeer's chairman, Jihan Wu, mentioned collaborating with DHI to leverage Bhutan's clean energy resources to support blockchain technologies. This partnership aims to create international networks that could benefit Bhutan's technology sector.

Despite concerns about potential losses post-halving, some experts believe that the decrease in mining rewards could be balanced out by an increase in network fees. Others, such as Jimmy Zhao from BNB Chain, pointed out that Bitcoin-based nonfungible tokens (NFTs) could also boost miner profitability after the halving event.

In 2019, Bhutan began using hydropower for Bitcoin mining when the price was around $5,000. DHI, which manages assets worth over $2.9 billion, had been discreetly building a crypto portfolio, which only came to light during the bankruptcy proceedings of crypto companies Celsius and BlockFi.

Grayscale's report in February 2024 estimated that Bitcoin Ordinals generated more than $200 million in transaction fees for miners, indicating alternative income sources for miners following the halving.