Bhutan Cuts Bitcoin Holdings by $22M as Mining Costs Surge

Highlights:

• Bhutan transferred 184 Bitcoin worth $14 million to market maker QCP Capital this week.
• The country’s Bitcoin reserves dropped sharply from 13,295 BTC to about 5,700 BTC now.
• Bitcoin price below $73,000 causes 24-42% unrealized losses for spot Bitcoin ETF holders. 

On Wednesday, Bhutan transferred 184 Bitcoin valued at $14 million, according to data from Arkham. Last week, it transferred 100.8 Bitcoin valued at $8.3 million. Overall, the country transferred a total of $22.3 million in Bitcoin. The country sent the Bitcoin to QCP Capital, a firm that deals with large sales of cryptocurrencies. It is, however, not an indication that the coins will be sold immediately, but could be a move to sell them in the future. The transactions occurred at a time when the price of Bitcoin continued to decline.

Bhutan has transferred $22.4M of Bitcoin out of their wallets in the past week to sell. Their transfer 5 days ago was sent directly to the labeled addresses of market maker QCP Capital.

From our observations, Bhutan periodically sells BTC in clips of around $50M, with a… pic.twitter.com/OsL3PzPZDp

— Arkham (@arkham) February 4, 2026

Bhutan Reduces Bitcoin Holdings Due to Higher Mining Costs

Bhutan began its Bitcoin mining operation in 2019, primarily fueled by hydroelectric energy. Over the years, it has accumulated approximately $765 million worth of Bitcoin, ranking it among the top holders. However, the cost of mining a single Bitcoin has increased by almost twice as much since the last halving, reducing profits substantially.

Bhutan mined approximately 8,200 Bitcoins in 2023. However, the current scenario is no longer conducive to such production. The recent sales have significantly reduced the reserves, lowering them from a high of 13,295 to approximately 5,700 currently. This has resulted in Bhutan ranking seventh among the governments that hold Bitcoin, after the United States, Ukraine, El Salvador, China, the United Kingdom, and the United Arab Emirates.

The government has not commented on the recent transactions. Arkham pointed out that Bhutan usually sells Bitcoin in bulk amounts, which is typically around $50 million. The recent transactions are following the same trend, but the amount of reduction is higher than before. Bhutan is reducing its exposure to Bitcoin, but the investors in US-based spot Bitcoin ETFs are remaining consistent despite the current market conditions.

Bitcoin ETF Holders Stay Confident Despite Recent Price Drops

James Seyffart, an ETF analyst on X, said that the owners are “still hanging in there pretty good” despite the four-month decline in Bitcoin prices. He also stated that investors have experienced the biggest paper losses since the launch of US spot Bitcoin ETFs. Since Bitcoin is currently trading below $73,000, Seyffart estimated that the unrealized losses are about 42%. However, he also stated that the outflows have been modest compared to the huge inflows at the market peak.

Despite this, the ETFs are still hanging in there pretty good… They've seen over $7 billion in outflows since 10/10/25 when things started crumbling but that's not too shabby considering these funds took in ~$63 bln at their peak pic.twitter.com/RbZYurrWJl

— James Seyffart (@JSeyff) February 4, 2026

Before October’s downturn, investors had poured about $62.11 billion into spot Bitcoin ETFs. Early data from Farside Investors shows that inflows have dropped to roughly $55 billion. Seyffart called this decline mild compared to the earlier surge. Investment researcher Jim Bianco said the average ETF holder sits about 24% underwater but keeps holding. This shows that investors remain confident for the long term, even as prices stay weak.

While 94% are still holding, the AVERAGE holder is now 24% underwater and collectively holding, nearing a $11B loss. pic.twitter.com/ahI2QjKniE

— Jim Bianco (@biancoresearch) February 4, 2026

Not all analysts are positive about the situation. Rand, a crypto analytics firm, noted that ETFs have been experiencing outflows for three months in a row. This is the first time this has happened since ETFs were introduced. This is happening as the price of Bitcoin has dropped by 25% in the last month. Not all analysts agree on the situation. Eric Balchunas, an ETF analyst, said that investors are being “very short-sighted.” He noted that Bitcoin is up 400% since 2022. It has performed much better than traditional assets such as gold and silver.