Bhutan’s Sovereign Fund Executes Major ETH Leverage via Aave

Druk Holding & Investments, Bhutan’s sovereign wealth fund, has taken a strategic position in Ethereum, leveraging $459 million worth of ETH via Aave.

Move into Ethereum

Druk Holding & Investments made headlines by leveraging a major Ethereum position through Aave. The fund used an address linked to Aave for a leveraged long position in Ethereum worth approximately 117,000 ETH, or about $459 million. The strategy involved withdrawing 42,000 ETH and $54 million USDT from Binance, converting USDT to ETH, and depositing it into Aave for further leverage by borrowing $275 million USDT to acquire more Ethereum.

“The address appears to be engaging in leveraged long positions: withdrawing 42,000 ETH and $54 million USDT from Binance, converting the USDT to ETH and depositing it into Aave, and borrowing $275 million USDT to further purchase ETH.” — Emmett Gallic, Analyst, Arkham

Bhutan’s Crypto Strategy

The involvement of Bhutan’s state-owned investment arm showcases the nation’s growing interest in cryptocurrencies, with Ujjwal Deep Dahal leading Druk Holding’s operations. This move follows historical crypto dealings, including previous BTC and ETH transactions.

The immediate reaction in the DeFi market centers around Aave, as the leveraged ETH position signals substantial confidence in Ethereum’s prospects. Analysts are observing potential market ripples, especially with a sovereign fund’s deepening ties with DeFi protocols.

Implications and Future Prospects

The implications are manifold, spanning financial, regulatory, and technological spectrums. While no official commentary from Bhutan’s officials or institutional leaders has been released, the stake has posed questions on sovereign wealth strategies and cryptocurrency’s future roles.

Should Druk Holding’s strategy yield favorable outcomes, more states might explore the confluence of traditional finance and DeFi. This could lead to regulatory evolutions and economic models embracing blockchain technology at a national level.