Bitcoin Becomes the New Favorite of National Strategies: Small Countries are Competing to Build Digital Asset Reserves

On the global financial stage, Bitcoin is gradually transforming from a popular choice for investors to an important component of national strategies. In May 2025, data revealing the Bitcoin holdings of various countries worldwide sparked widespread attention. The data shows that a major country ranks first with 207,189 Bitcoins, valued at nearly $2.2 billion. Following closely is another major country, holding 194,000 Bitcoins. Notably, some smaller countries such as Bhutan and El Salvador also hold a place on the list, with 13,029 and 6,089 Bitcoins, respectively. The total amount of Bitcoins held by governments worldwide reaches 529,705, accounting for 2.522% of the total Bitcoin supply.

However, what has recently sparked heated discussions is a country that was originally absent from the list - Pakistan. This South Asian country has announced the establishment of a national Bitcoin strategic reserve and promised to "never sell". This move not only places Pakistan at the forefront of cryptocurrency but also raises questions about why small countries are so eager to embrace Bitcoin.

Pakistan's Bitcoin Ambitions: From Energy to National Reserves

Pakistan's Bitcoin strategy has attracted widespread attention on the international stage. In May 2025, at a Bitcoin conference, Bilal Bin Saqib, Special Assistant to the Prime Minister and Advisor on Blockchain and Cryptocurrency Affairs, announced that the country would emulate a major power by establishing a national Bitcoin strategic reserve and holding these digital assets for the long term. Although the specific size of the holdings has not been disclosed, Pakistan's ambitions are already clear.

Pakistan's Bitcoin strategy is not limited to reserves. The government has also announced the allocation of 2000 megawatts of surplus electricity for Bitcoin mining and artificial intelligence data centers. This initiative aims to address the country's underutilization of energy, especially since coal-fired power projects like Sahiwal and Qasim Port are currently operating at only 15% capacity. Through mining, Pakistan hopes to convert this "idle energy" into economic value. Based on the current Bitcoin price, mining each Bitcoin could bring substantial revenue to the nation.

At the same time, Pakistan is accelerating the improvement of its digital asset management framework. On May 22, 2025, the Pakistan Digital Asset Authority (PDAA) was officially established to regulate cryptocurrency trading, DeFi applications, and asset tokenization, and to promote the application of blockchain technology in government affairs, land records, and the financial sector. The establishment of PDAA was proposed by the Pakistan Cryptocurrency Commission, which includes well-known industry figures as advisors, injecting international experience into policy formulation.

The cryptocurrency user base in Pakistan is also remarkable. It is expected that by 2025, the number of cryptocurrency users in the country will exceed 27 million, accounting for more than 10% of the total population. This not only reflects the enthusiasm of the young population for digital assets but also provides public support for the government to promote a cryptocurrency economy.

The Bitcoin Craze of Small Countries: From Bhutan to El Salvador

Pakistan is not an isolated case. Looking globally, multiple small countries are actively exploring the Bitcoin sector. Bhutan, this small nation at the foot of the Himalayas, has become an "invisible player" in Bitcoin mining thanks to its abundant hydropower resources. The latest data shows that Bhutan holds 13,029 Bitcoins, worth approximately $138 million, accounting for 0.062% of the total. These Bitcoins have been accumulated by state-owned enterprises through mining, with low hydropower costs giving Bhutan a competitive edge in the mining sector.

El Salvador is a pioneer in the small country Bitcoin strategy. In 2021, this Central American nation became the first in the world to make Bitcoin legal tender and has continued to increase its reserves. As of May 2025, El Salvador holds 6,089 Bitcoins, worth approximately $64.53 million, accounting for 0.029% of the total. The unrealized profits from its Bitcoin reserves have reached $357 million, demonstrating the returns brought by the price increase. However, El Salvador's Bitcoin journey has not been smooth sailing. An international financial institution reached a $1.4 billion loan agreement with it in December 2024, but required the maintenance of the existing reserve size and the revision of relevant laws.

Ukraine's Bitcoin holdings come with a special background. During the recent conflict, Ukraine raised over $100 million through cryptocurrency donations, becoming a significant source of its 46,351 Bitcoins (worth approximately $491 million). Ukraine's crypto policy is relatively open, attracting a large number of Web3 startups, with its Bitcoin holdings accounting for 0.221% of the total, ranking among the top for small countries.

In contrast, the 66 Bitcoins in Georgia (worth approximately $6.99 million) seem trivial and may be a symbolic holding of early confiscated assets, with no clear national strategy formed yet.

The Motivations of Small Countries Embracing Bitcoin

Behind the enthusiasm of small countries for Bitcoin lies the intertwining of economic, geopolitical, and technological factors. Firstly, Bitcoin is seen as a tool to hedge against economic difficulties. Many small countries face pressures from insufficient foreign exchange reserves, inflation, or heavy debt. For example, El Salvador's public debt accounts for over 90% of its GDP, and Pakistan similarly bears a heavy debt burden. The volatility of traditional financial markets has led these countries to seek Bitcoin as an alternative asset.

Secondly, energy utilization is the direct driving force behind the Bitcoin strategy of small countries. Bhutan's hydropower mining and Pakistan's 2000 MW power distribution plan are similar. Many small countries have underutilized renewable energy or surplus electricity; Bitcoin mining can not only monetize these resources but also attract international mining companies and technology firms.

Furthermore, Bitcoin policy has become a "magnet" for attracting foreign investment. In the global Web3 and blockchain boom, small countries attract startups and capital inflows through lenient cryptocurrency policies. Ukraine's crypto ecosystem has nurtured several Web3 startups, and Pakistan's PDAA also aims to support startups.

Finally, geopolitical considerations play an important role in the Bitcoin strategies of small countries. In the current international financial system, small countries often find themselves in a passive position. The decentralized nature of Bitcoin makes it a potential "financial weapon," helping small countries to gain more voice in the global game.

Comparison of Major and Minor Countries: From Seizure to Strategic Holding

Unlike small countries, the Bitcoin held by large countries mostly comes from law enforcement seizures. One large country holds 207,189 Bitcoins mainly sourced from assets confiscated in illegal cases by law enforcement; another large country holds 194,000 Bitcoins also from the seizure of illegal assets; a European country holds 61,000 Bitcoins, which are largely the result of law enforcement actions. The Bitcoin holdings of these large countries resemble "unexpected gains" rather than a proactive strategy.

Small countries tend to accumulate Bitcoin through mining or policy purchases. Bhutan's 13,029 Bitcoins come from hydropower mining, while El Salvador's 6,089 Bitcoins are a product of national strategy. Ukraine's 46,351 Bitcoins, although partially from donations, also reflect its proactive embrace of cryptocurrency policy. While the proportion of Bitcoin holdings in small countries is low, their strategic significance is greater, aiming to achieve economic diversification or hedge against risks through Bitcoin.

It is worth noting that a certain major European country cleared its Bitcoin reserves (about 50,000 coins) in 2024 to pay off debts. This move stands in stark contrast to the long-term holding strategy of smaller countries and also reflects the divergence of major countries in Bitcoin policy.

The Scrutiny of International Financial Institutions and the Persistence of Small Countries

The path for small countries to embrace Bitcoin is not smooth, as the scrutiny of international financial institutions always looms. The case of El Salvador is the most representative. In December 2024, an international financial institution reached a $1.4 billion loan agreement with El Salvador, but required it to maintain its current Bitcoin reserve levels and amend relevant laws. The institution warned that Bitcoin reserves could exacerbate El Salvador's debt risk. Nevertheless, El Salvador has performed strongly in economic reforms and has obtained subsequent loans.

The situation in Pakistan is more forward-looking. Its digital asset management bureau emphasized compliance with international regulatory standards from the outset, attempting to gain policy space under the scrutiny of international financial institutions. Pakistan's cryptocurrency policy is not limited to Bitcoin reserves but also includes the extensive application of blockchain technology in government affairs and the financial sector. This "comprehensive layout" may provide it with greater flexibility in negotiations with international financial institutions.

The cautious attitude of international financial institutions reflects the dual nature of Bitcoin: it is both an opportunity for the economic transformation of small countries and a potential threat to financial stability. As small countries embrace Bitcoin, they must find a balance between innovation and compliance.

Unique Advantages and Challenges of Pakistan

Compared to other small countries, Pakistan's Bitcoin strategy has its uniqueness. First, its demographic dividend and crypto user base provide vast market potential. With 27 million crypto users, they are not only a consumer group but also a driving force for innovations in blockchain technology. Secondly, Pakistan's energy resources and geographical location make it a potential crypto hub in South Asia. The 2000 megawatt power distribution plan not only absorbs excess energy but could also attract mining investments from neighboring countries.

However, the challenges are also significant. Pakistan's power infrastructure is aging, and coal-fired projects may face environmental pressures. In addition, the volatility of the cryptocurrency market could pose a threat to its reserve value. Although El Salvador's Bitcoin reserves have made a profit of $357 million, they have also undergone severe price fluctuations. More importantly, Pakistan needs to proceed cautiously with policies under the regulatory framework of international financial institutions to avoid restrictive loan conditions.

Conclusion: The Bitcoin Gamble of Small Nations

Pakistan's Bitcoin strategy is a microcosm of small countries embracing the digital economy. From Bhutan's hydropower mining to El Salvador's fiat currency experiment, and to Ukraine's wartime donations, these nations see hope for economic revival in the wave of Bitcoin. Bitcoin is not just an asset; it is also a nexus of energy, technology, and geopolitics. Small countries are trying to find their place in the global financial system through Bitcoin.

However, this gamble is not without risks. The volatility of Bitcoin, regulatory pressures from international institutions, and infrastructure limitations could thwart the ambitions of small countries. But as Bilal Bin Saqib said: "Once misunderstood, now unstoppable." For Pakistan and countless small nations, Bitcoin is not just a digital asset; it is a belief—that in the future of the digital economy, they do not want to be absent.