Nestled in the Himalayas between India and China, the Kingdom of Bhutan is charting an unconventional economic course, harnessing its abundant hydropower resources to mine “green” cryptocurrencies.

The nation’s sovereign wealth fund sees this strategy not just as a potentially lucrative investment, but as a vital tool to diversify the economy, generate employment, and combat a worrying exodus of its young, educated populace.

Harnessing hydropower for digital assets

Ujjwal Deep Dahal, the chief executive of Bhutan’s sovereign wealth fund, Druk Holding and Investments Ltd (DHI), outlined the nation’s unique approach.

Green cryptocurrencies, unlike their more energy-intensive counterparts often reliant on fossil fuels, are mined using renewable energy sources.

For Bhutan, this means leveraging its status as a country running entirely on clean hydropower.

“We are a nation that runs 100% on hydropower, and every digital coin we mine in Bhutan using hydropower offsets that coin which gets mined using fossil fuels,” Dahal explained to Reuters on Tuesday.

So a coin mined in Bhutan will contribute to the green economy.

DHI, which also controls the country’s primary power generation utility, began incorporating cryptocurrencies into its investment portfolio back in 2019.

Dahal described the move as both a “tactical investment” and a potential “gamechanger” for the nation, long renowned for prioritizing its unique Gross National Happiness (GNH) index over traditional GDP metrics.

This index considers factors like sustainability and well-being alongside economic output.

The crypto mining operations involve using energy-intensive supercomputers, powered entirely by Bhutanese hydropower, to generate digital assets for the blockchain.

Beyond revenue: tackling brain drain and tapping ESG

The strategy has already yielded tangible results.

According to senior officials in the capital, Thimphu, Bhutan has earned millions of dollars from its crypto investments in recent years, even using some profits to cover government salaries for a two-year period.

Beyond direct financial gains, the initiative aims to address pressing domestic challenges.

Bhutan, with a population of around 800,000, is grappling with significant “brain drain.”

Government estimates suggest over 10% of its young people emigrated between 2022 and 2023, contributing to a youth unemployment rate of 16.5% in 2024.

DHI sees the burgeoning digital asset sector as a potential solution. “Bitcoin has not just given more value to hydropower energy, it has also increased access to liquidity in foreign currency,” Dahal stated, adding that training Bhutan’s youth in “blockchain and AI techniques would fuel jobs.”

Furthermore, officials are exploring an intriguing avenue: positioning Bhutan’s verifiably “green” coins as attractive assets for large corporations seeking to meet their environmental, social, and governance (ESG) targets.

This could create a premium market for Bhutanese-mined cryptocurrencies.

Powering the ambition: the hydropower hurdle

However, the success and scalability of Bhutan’s green crypto ambitions hinge critically on significantly expanding its hydropower infrastructure.

Analysts note that realizing the vision of becoming a global hub for green digital currency requires moving beyond the current generating capacity of approximately 3.5 gigawatts towards harnessing a potential estimated at 33 gigawatts.

Dahal acknowledged this necessity, outlining concrete expansion plans.

“We have plans to generate 15 gigawatts in the next 10 to 15 years,” he added, signaling a long-term commitment to building the energy foundation required for this innovative economic diversification strategy.

The kingdom is thus embarking on a journey where sustainable energy and cutting-edge digital finance intertwine, aiming to secure both economic prosperity and the well-being of its future generations.

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A late-session shockwave from chip giant Nvidia sent tremors through both equity and cryptocurrency markets on Wednesday, souring investor sentiment and triggering a pullback in digital assets as traders digested the implications of a significant financial hit tied to US trade policy.

Nvidia’s costly China chip ban

The mood shift followed Nvidia’s disclosure in a regulatory filing of an anticipated $5.5 billion charge for its fiscal first quarter.

This substantial write-down stems directly from the Trump administration’s decision to restrict the export of the company’s advanced H20 artificial intelligence chips to China.

The news landed heavily in after-hours trading, sending Nvidia (NVDA) shares tumbling 8% to $89.10 and validating unusual bearish activity observed in NVDA put options just a day prior, which had hinted at an impending market downturn.

The fallout also weighed particularly on cryptocurrencies associated with the artificial intelligence (AI) narrative, which underperformed the broader market.

Crypto markets follow suit

Reflecting the soured risk appetite, Bitcoin (BTC), the market’s dominant cryptocurrency, reversed its earlier gains.

Having touched a two-week high of $86,440 earlier in the day, Bitcoin slid back towards $83,600, according to CoinDesk data.

Other major cryptocurrencies mirrored this retreat; the payments-oriented token XRP dipped over 2% to $2.08, while Cardano’s ADA token shed 4% to trade at $0.61.

The CoinDesk 20 Index, a measure of the broader digital asset market, registered a decline of more than 2%, indicating widespread weakness.

Broader market jitters emerge

The pessimism extended beyond crypto into traditional equity futures. Contracts tied to the tech-heavy Nasdaq index fell over 1%, signaling negative expectations for the upcoming trading session and reinforcing the risk-off sentiment across asset classes.

Against this backdrop of heightened sensitivity, market participants are now turning their attention to crucial upcoming economic indicators and central bank commentary.

The US retail sales report for March, due Wednesday morning Eastern time, is highly anticipated. Economists polled by Dow Jones forecast a 1.2% month-over-month increase in consumer spending, a significant acceleration from February’s 0.2% rise.

A stronger-than-expected retail sales figure could potentially alleviate some fears of an impending recession, fears that have been stoked by President Donald Trump’s ongoing trade conflicts.

However, analysts caution that the market might discount robust data as “backward-looking,” potentially failing to capture the impact of the significant escalation in trade tensions witnessed throughout April.

Powell’s outlook under scrutiny

Adding to the anticipation, Federal Reserve Chairman Jerome Powell is scheduled to deliver remarks on his outlook for the US economy at the Economic Club of Chicago on Wednesday.

His comments will be intensely scrutinized for any hints regarding the future path of monetary policy. “All eyes are on Powell. Markets are holding their breath for Powell on Wednesday,” noted Secure Digital Markets in a research note Tuesday.

Between the trade war and rising recession chatter, traders are watching for any hint the Fed might be forced to cut sooner than expected.

The potential for rate cuts has gained traction as forward-looking indicators like inflation breakevens have declined amidst the trade turmoil, suggesting a disinflationary impact from tariffs that could give the Fed room to ease policy.

This aligns with recent comments from Federal Reserve Governor Christopher Waller, who stated earlier this week that the central bank might need to implement a series of rapid “bad news” rate cuts should President Trump reimpose the broad tariffs unveiled on April 2 (most of which were subsequently suspended for 90 days, excluding those on China).

The confluence of corporate earnings shocks, trade policy uncertainty, and upcoming macroeconomic signals leaves markets in a state of heightened alert.

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