Bhutan Shifts $107 Million Bitcoin Position Following First Fed Rate Cut of 2025

The Royal Government of Bhutan transferred 913 Bitcoin worth approximately $107 million to new cryptocurrency wallets on Thursday, according to Cointelegraph. The move occurred just after the US Federal Reserve delivered its first interest rate cut of 2025, reducing the federal funds rate by 25 basis points to a range of 4.00-4.25 percent.

Blockchain analytics firm Arkham tracked the transaction from the government-labeled wallet to two newly created addresses. The original wallet still holds 9,652 Bitcoin worth over $1.1 billion, making Bhutan one of the largest sovereign holders of the cryptocurrency. This marked the first activity from the wallet in a month, following a previous $92 million transfer on August 18.

The timing coincided with broader whale activity in the Bitcoin market. An unknown whale that had been dormant for 12 years transferred $116 million worth of Bitcoin on Wednesday, shortly before the Federal Open Market Committee meeting. That whale had initially acquired the tokens for just $847 each, now worth around $117,000 per coin.

Market Concerns Over Potential Government Selling Pressure

The Bhutan transfer raises questions about potential selling pressure at a sensitive time for cryptocurrency markets. Government Bitcoin sales can create substantial downward pressure due to the large volumes involved and the psychological impact on retail investors. If Bhutan liquidated its entire Bitcoin holdings, it could add more than $1 billion of supply to the market.

The Fed's rate cut decision had mixed effects on Bitcoin prices. Crypto.com analysis shows that lower interest rates typically support Bitcoin by reducing the opportunity cost of holding non-yielding assets like cryptocurrency. When rates decline, traditional savings accounts and bonds become less attractive, potentially driving capital toward alternative assets.

However, the market reaction was muted compared to expectations. Bitcoin rose about 1 percent immediately following the rate announcement but later gave up gains. As we previously reported, nations considering Bitcoin reserves face the challenge of balancing portfolio diversification against short-term volatility. Bhutan's Bitcoin strategy has helped double civil servant salaries, demonstrating how cryptocurrency revenues can address fiscal challenges.

Government Bitcoin Holdings Reshape Market Dynamics

The emergence of sovereign Bitcoin holders represents a fundamental shift in cryptocurrency market structure. Unlike corporate treasuries that typically maintain long-term positions, government entities may liquidate holdings for fiscal needs or policy changes. This creates new uncertainty patterns that institutions and retail investors must navigate.

Cointelegraph research shows that government movements now join traditional whale activity as key market drivers. The top 2 percent of Bitcoin addresses control over 90 percent of supply, though many are exchange and institutional cold wallets rather than individual holders.

The Fed's dovish pivot may influence more government Bitcoin activity. BeInCrypto analysts project that accommodative monetary policy could drive additional sovereign adoption of cryptocurrency reserves. Lower borrowing costs reduce fiscal pressure on governments while potentially increasing Bitcoin valuations.

Market participants must now monitor both macroeconomic policy shifts and government wallet movements. The interplay between central bank decisions and sovereign cryptocurrency holdings creates complex dynamics for price discovery. While the Fed's rate path suggests continued support for risk assets, the timing and scale of government Bitcoin transfers could provide countervailing pressures that shape market direction in the coming months.