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Bhutan Bitcoin Sell-Offs Raise Questions as Net Outflows Reach $120 Million

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Brian Armstrong's Bold Prediction: AI Agents Will Soon Dominate Global Financial

TLDR:

  • Bhutan has recorded a net Bitcoin outflow of approximately $120 million since the start of 2025.
  • The government moves Bitcoin in $5M–$10M batches, sending funds to exchanges and firms like QCP Capital.
  • A recent transfer of 123.7 BTC worth $8.5M went to a fresh address with a different address type.
  • Bhutan’s total Bitcoin holdings have dropped by around 1,700 BTC, raising questions about a full exit.

Bhutan Bitcoin sell-offs have drawn attention from the crypto community in recent weeks. On-chain intelligence firm Arkham has flagged a steady pattern of Bitcoin liquidations by the Himalayan kingdom.

Since the start of 2025, Bhutan has moved approximately $158.57 million out of its main holding addresses. With $38.84 million transferred back in, the net outflow sits at around $120 million. This activity points to a consistent reduction in the country’s Bitcoin reserves.

Bhutan Moves Bitcoin in Steady Clips to Exchanges and Market Makers

The Bhutanese government has been sending Bitcoin to exchanges and market makers in batches. Each transfer typically falls within the $5 million to $10 million range.

Recipients have included trading firms like QCP Capital, per Arkham’s data. This pattern suggests a structured approach to liquidation.

In mid to late September 2025, Bhutan sold approximately 3,500 BTC over a short window. That period stood out as one of the larger sell-offs from the country’s wallets.

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The transfers followed the same routing pattern seen throughout the year. Arkham noted the activity as consistent with Bhutan’s overall selling behavior.

More recently, Bhutan moved 123.7 BTC, valued at roughly $8.5 million, to a fresh address. Arkham observed that the destination used a different address type from Bhutan’s main holdings.

This detail raised questions about the ultimate destination of the funds. The transfer size closely matched the country’s typical batch range.

Arkham flagged the transfer on X, citing the address type difference and the routing to a new wallet. The post attracted wide attention from traders and analysts across the crypto space.

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Many began monitoring Bhutan’s on-chain wallets more closely following the announcement. The firm also noted a rise in outbound transfer frequency in recent weeks.

Questions Mount Over Bhutan’s Bitcoin Mining Future

Bhutan’s outbound transfer volume has been rising, with total holdings declining by roughly 1,700 BTC since January. This reduction has come through a series of smaller, recurring outflows rather than one large transaction.

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The approach points to a gradual and methodical drawdown strategy. Arkham’s data confirms that the pattern has held steady throughout the year.

Not every outbound transfer reflects a permanent exit from Bhutan’s Bitcoin reserves. A portion totaling $38.84 million was transferred back into its holding addresses during the same period.

However, the net movement still strongly favors outflows. The country appears to be reducing its position in a measured way.

Bhutan became one of the first sovereign nations to mine Bitcoin at a national scale. The country drew on its hydroelectric energy surplus to run large mining operations over several years.

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Its growing reserves went largely unnoticed until on-chain platforms brought the wallets to public attention. Whether Bhutan plans to fully exit the Bitcoin mining sector remains an open question.

Market observers are watching Bhutan’s wallets closely for signs of further acceleration. Sovereign-level selling, even in small clips, tends to draw attention from institutional traders.

The growing frequency of transfers adds weight to concerns about a possible full exit. Arkham’s tracking of Bhutan’s addresses will remain the key source of updates going forward.

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Crypto World

Kalshi Hit With Washington State Lawsuit

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Kalshi Hit With Washington State Lawsuit

Kalshi is facing another state-level lawsuit after the state of Washington on Friday filed allegations that the prediction market operator violated state gambling laws with its products.

The Washington Attorney General’s complaint cites the Pacific Northwest state’s existing ban on online gambling and otherwise strict oversight of the gaming market, in claiming Kalshi violated the Washington Consumer Protection Act, Gambling Act, and Recovery of Money Lost at Gambling Act.

“Kalshi’s website and app show consumers a range of events that they can bet on and the odds for those various events, which dictate how much the bettor will be paid out if the event occurs,” an announcement from Attorney General Nick Brown said. “This is exactly how sportsbooks and other gambling operations function. Kalshi advertises that they allow consumers to ‘bet on anything’ by simply calling their service a ‘prediction market’ rather than ‘gambling.’”

The definition of gambling under Washington law is “staking or risking something of value upon the outcome of a contest of chance or a future contingent event,” and Kalshi’s activities fall squarely within that definition, the AG’s announcement said. “Each Kalshi bet risks money, relies in part on chance, and promises a payout to winners.”

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Kalshi immediately sought to move the case to federal court, saying in its filing that the issues raised by the Washington suit are already being  litigated in other federal courts and that there had been “no warning or dialogue” from Washington state  prior to the lawsuit.

Related: SEC interpretation on crypto laws ‘a beginning, not an end,‘ says Atkins

Cover page of State of Washington v. KalshiEx, Source: King County Superior Court

State AGs and gaming regulators mount legal fights across the country

A Nevada judge earlier this month temporarily blocked Kalshi from operating in the state, finding that state authorities are reasonably likely to prevail in a legal fight over whether the company’s event contracts violate Nevada gambling laws.

Carson City District Court Judge Jason Woodbury issued a temporary restraining order on Friday, siding with a Nevada Gaming Control Board motion to block Kalshi from operating in the state for 14 days.

Kalshi had argued that its contracts are under the exclusive jurisdiction of the US Commodity Futures Trading Commission, an agency that has backed prediction markets that are fighting in multiple state courts over accusations of offering illegal gambling.

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Days earlier, Arizona Attorney General Kris Mayes announced charges against the companies behind Kalshi, alleging that the company operated an “illegal gambling business in Arizona without a license” and offered illegal election wagering.

While Kalshi faces several similar cases filed by gaming authorities in other US states over the platform allegedly offering sports gambling to residents without a license, Arizona was one of the first to file criminal charges.

The state-level cases come as prediction markets are under scrutiny by lawmakers for offering bets on US military actions, citing concerns about insider information in the government.

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