TLDR
- Druk Holdings, Bhutan’s investment arm, is building a significant leveraged position in Ethereum (ETH).
- Wallets linked to Druk Holdings withdrew 42K ETH and $54M USDT from Binance to increase their ETH holdings.
- The entity deposited ETH on Aave, borrowing USDT to expand its leveraged position further.
- Druk Holdings now holds 117K ETH, which is dependent on Ethereum’s market performance.
- The move exposes Druk Holdings to potential liquidations if ETH prices fall below $1,400.
- Bhutan’s known wallets previously held minimal ETH but began acquiring more starting in September 2025.
Wallets potentially connected to Bhutan’s investment arm, Druk Holdings, have been accumulating a significant leveraged position in Ethereum (ETH). These wallets have engaged in large-scale transactions, including withdrawing 42,000 ETH and $54 million USDT from Binance. Analysts have observed that the funds were used to buy more ETH, which was subsequently deposited on Aave, allowing for the borrowing of more USDT.
Druk Holdings’ Leveraged ETH Position
The wallets suspected to be linked to Druk Holdings have made a series of strategic moves within the Ethereum (ETH) ecosystem. After withdrawing ETH and USDT from Binance, these wallets continued to build their position by purchasing more ETH. They deposited the ETH onto Aave, a decentralized finance (DeFi) platform, and borrowed USDT in the process. This cycle of borrowing and purchasing ETH has resulted in a large leveraged position, with analysts suggesting that the entity may be exposed to significant risk if the market declines.
Aave’s lending protocol enabled the wallets to leverage their position by using ETH as collateral to borrow more USDT. The wallets’ ETH holdings now total 117,000 ETH, an amount that depends heavily on the performance of the cryptocurrency market. While the move offers the potential for higher profits, it also exposes the entity to possible liquidations should the price of ETH fall below a certain threshold. At current prices above $3,200, these positions are liquidatable at around $1,400 per ETH.
Druk Holdings’ Ethereum Strategy and History
The Royal Government of Bhutan, through Druk Holdings, has been increasing its exposure to Ethereum in recent months. In 2025, Bhutan held only 3,000 ETH but divested part of the holdings over time. By September 2025, Bhutan began accelerating its acquisition of ETH, with much of it previously sitting idle in its wallets. The ETH holdings are now utilized for passive income via DeFi protocols, such as Aave and Lido, unlike its Bitcoin (BTC) holdings, which have been moved to new addresses for security reasons.
Despite having a minimal ETH balance of 17.695 ETH in its official wallets, Druk Holdings has made significant strides in Ethereum exposure. The entity’s involvement with Aave and Lido has grown over time, with the entity having moved over $735 million through Aave. The current ETH holdings on Aave are mostly in the form of wrapped ETH (AESTHWETH), valued at over $458,000. Furthermore, the entity holds $275.6 million on Lido, expanding its exposure across Ethereum-based platforms.
Bhutan’s Ethereum Involvement
Druk Holdings’ growing Ethereum position coincides with Bhutan’s broader strategy to adopt blockchain technology. In late 2025, Bhutan launched an Ethereum-based national identity system, with Ethereum co-founder Vitalik Buterin playing a key role. The government’s move toward blockchain technology aligns with its interest in leveraging Ethereum for passive income opportunities, distinguishing it from its Bitcoin strategy. Despite concerns about the volatility of leveraged positions, Bhutan’s state-backed entity continues to utilize Ethereum’s DeFi ecosystem for its portfolio growth.
With these actions, Bhutan’s role in the Ethereum space has expanded beyond just holding the asset. The government’s increasing interaction with DeFi platforms, along with the move to leverage ETH positions, marks a shift toward a more aggressive digital asset strategy. However, with Ethereum’s price volatility, these positions could face substantial risks should market conditions change drastically.
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