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This Tiny Country Has A Secret Bitcoin Mine

High in the South Asian Himalayan mountains, there exists a tiny country between China and India.

The country controls only 14,824 square miles and boasts a population of only 727,145 – less than any US state besides Vermont and Wyoming. Landlocked, the country is automatically at a huge disadvantage economically.

But, this tiny kingdom of Bhutan is blessed with one natural resource in abundance: hydroelectricity. Bhutan has an absolutely massive amount of hydroelectric power due to ancient glacier rivers – so much so that hydroelectricity accounts for nearly 30% of the country’s GDP and powers the home of every single resident.

However, Bhutan is not content with merely selling hydroelectricity to their Chinese and Indian neighbors. They have bigger goals with their greatest gift, and for the past two years, they’ve made this secret dream a reality.

They are using these hydro reserves to power their own bitcoin mine.

A Long Time Coming
Despite its small stature, Bhutan frequently punches above its weight when it comes to thinking outside the box. The country is famous for its use of innovative economic concepts like Gross National Happiness, high-end tourism (hitting visitors with expensive visa fees), and the purchasing of cryptocurrency.

But, when Covid hit in 2020, Bhutan closed its borders, shuttering that lucrative tourism industry. They had to think of another way to generate revenue, so they turned to their great hydro reserves with a crazy idea to power their own bitcoin mines, when BTC was trading at ~$5,000.

In many ways, it was a natural fit. China’s ban on crypto mining left many miners out in the cold, searching for another place with cheap energy to power their rigs. Bhutan has immense hydroelectric power available for cheap, and the government is already familiar with and friendly to crypto.

Opening a bitcoin mining rig there made too much sense not to happen.

Unanswered Questions
Unfortunately, the world’s second sovereign bitcoin mine (after El Salvador) is not without questions and doubts.

Nobody knows where the mine is, how powerful it is, if it’s turned a profit, or why Bhutan kept it a secret. Basically, nobody knows what Bhutan’s up to, or why.

The only reason we know anything at all is because the country’s official investment arm, Druk Holdings Investments (DHI)’s, name popped up in BlockFi and Celsius bankruptcy documents.

The revelation obviously leads one to ask: what other countries are mining or accumulating BTC? We know that Venezuela and Russia have also admitted to buying BTC for their treasuries – are there others?

We are living in a time of money-shifting world order…

Where the BRIC countries (Brazil, Russia, India, and China) have now surpassed the G7 nations in GDP based on purchasing power parity (PPP) for the first time in history…

Where some oil sales are now being settled in the Chinese Yuan…

While the US is over $31 Trillion in debt and squabbling about a debt ceiling.

If you were a small country being pulled between world powers, what would you do?

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Venmo Me Some Bitcoin

It was another great week for mainstream adoption, as Paypal's (PYPL) Venmo and Robinhood (HOOD) both took major moves to make crypto more accessible to the wider public.

Venmo Crypto Transfers
It was about a year ago when PayPal first enabled users to transfer crypto between its platform and other wallets. Now, the company is allowing Venmo users to do the same.

Under the new plan, Venmo’s ~60 million users can now send crypto between Venmo, PayPal, and external wallets and exchanges.

Basically, it is now as easy to transfer crypto as it is to send somebody a Venmo.

Find a friend by searching for their name or by using a barcode (or now, wallet address), select the amount you want to send, and boom – the money is on its way.

Now, there are some limitations, of course.

For starters, you need to have crypto in your Venmo account in order to start the transferring process. Although it would be pretty neat, users won’t be able send anyone BTC with the USD from your bank or what’s already stashed away in your Venmo balance. While you can easily purchase crypto now on the platform (a feature that the company launched in 2021), your Venmo account still needs to be holding crypto in the first place before you transfer anything.

Moreover, for the time being, users will only be able to transfer what you can purchase on the platform – Bitcoin, Ethereum, Litecoin, or Bitcoin Cash. Venmo users also must verify their identity in order to transfer or receive crypto and, lastly, the service remains unavailable for those in Hawaii and New York.

Robinhood Connect
Robinhood is furthering its crypto ambitions with the release of fiat on-ramp Robinhood Connect. Robinhood Connect allows developers to embed the feature directly into their protocol, enabling users to fund a web3 wallet without having to exit the protocol or open a new window to access their Robinhood Crypto accounts.

In other words, developers now benefit from being able to quickly embed the feature directly into their dApps and customers, on the other hand, are now able to bypass the additional (often annoying) login and transferring steps. All in all, integrations like Connect make it a lot easier for ordinary people to move money from the fiat world to the crypto-verse.

In addition to Connect, Robinhood is also beefing up its Crypto platform with:

Because of its status as one of the world’s most popular trading platforms with over 12 million monthly active users (many of them on the younger side), any move by Robinhood into crypto is a welcoming sight.

On A Long Enough Timeline, Crypto Wins
As we’ve said before, during the bear market, it’s easy to get lost in the bad news. Whether it’s the regulators, a hack, a fraud, or just prices going down, the hits seem never-ending.

But, when you zoom out, the progress crypto is making becomes apparent. Countries are mining bitcoin. Mastercard is building a crypto credential standard. Visa is hiring engineers for an “ambitious” crypto product roadmap. An investment firm worth $1.4 trillion is starting a tokenized mutual fund on Polygon.

At the end of the day, when you feel like you’re about to be overwhelmed by the bad news, remember: mainstream adoption is coming, and long-term investors are in a position to reap its rewards.

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🔍 DEEP DIVES

Coinbase Is Mad As Hell and Not Going To Take It Anymore

Coinbase (COIN) went public almost exactly two years ago.

Heralded as a transformational moment for the crypto industry, it seemed as if there were only green pastures ahead for the technology that was Bitcoin (and crypto) and the companies supporting it.

Sure, there would be challenges in the years ahead, but no longer would the industry be attempting some Sisyphean feat.

The industry could finally focus on the technology, as the major regulatory problems seemed to have been solved. Why else would the regulators approve of Coinbase to go public?

If they had issues with, say, the company listing securities they would have brought it up at that point, right?

Of course, we ask this question in jest as obviously the truth is anything but.

We’ve spent a lot of time in recent months discussing the regulatory crackdown in the United States.

And now, because of this crackdown, the crypto industry is (unfortunately) beginning to seek safe haven outside the US’s borders.

This includes Coinbase, in what should be the United States’ crown jewel of crypto – an example of how to do crypto correctly.

Yet, it’s hard to find a US crypto company more at odds with the regulators than Coinbase.

The SEC hates Coinbase because they hate crypto, and Coinbase is the face of crypto in the United States, while Coinbase hates the SEC because they refuse to set clear rules for the industry they go out of their way to persecute.

Turns out that you can only kick somebody around for so long until they start to explore leaving.

That’s why, armed with a regulatory license from Bermuda, Coinbase has launched their new International Exchange.

The Coinbase International Exchange
Coinbase’s International Exchange (IEX) will offer institutional users something that Coinbase has never offered before: Bitcoin and Ethereum perpetual futures.

Perpetual futures are a financial instrument unique to crypto. A future is typically an agreement to buy an asset at a fixed price and amount at a predetermined future date, regardless of market conditions. A perpetual future is different in that the agreement doesn’t have an expiration date, hence the name “perpetual”. This allows traders to gain exposure to crypto with high leverage (in Coinbase’s case, up to 5x) with less risk.

Perpetual futures are a popular tool in crypto, but Coinbase has never offered them because they aren’t allowed in the US. Thus, the International Exchange allows Coinbase to expand both its product suite and geographical reach.

The IEX also allows Coinbase to take market share away from the traditionally dominant perpetual future players – FTX and Binance.

Looking Ahead
As Coinbase notes in their announcement blog post, they remain committed to the US, but:

Translation: If the US regulators don’t get their s**t together, Coinbase is going to continue diversifying itself away from the states.

And that’d be a shame for the country and all of the crypto consumers inside of it.

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