How Bhutan's Sovereign Fund Is Reshaping Its Ethereum Strategy

Bhutan’s investment landscape has attracted significant attention recently, particularly through the activities of its sovereign wealth fund, Druk Holdings. In early February, on-chain analytics uncovered a major shift in the fund’s cryptocurrency positioning, revealing a strategic repositioning of its Ethereum assets.

Rapid ETH Position Reduction Signals Strategic Shift

According to blockchain tracking data, Druk Holdings executed a substantial reduction in its Ethereum holdings, cutting back approximately 26,535 ETH within a single 24-hour window. This move represents a meaningful pullback from the fund’s previous aggressive accumulation strategy. At its peak just weeks earlier in mid-January, Bhutan’s sovereign fund had held nearly 117,000 ETH, signaling a significant shift in risk appetite and market positioning.

Aave Lending Platform Exposure and Risk Assessment

The Bhutan-linked address maintains a notable presence on the Aave lending protocol, currently holding 51,710.6793 stETH (liquid staking derivatives) against a borrowed position of 79.75 million USDT. With a health rate of 1.17, the position maintains reasonable safety margins, though the relatively tight threshold suggests the fund remains sensitive to market movements. This borrowing strategy typically indicates leveraged ETH exposure, allowing the fund to amplify both gains and losses from Ethereum price fluctuations.

Market Context: ETH at Current Levels

With Ethereum trading around $2.10K as of mid-February, Bhutan’s tactical withdrawal from its leveraged position may reflect prudent risk management. The fund’s decision to reduce holdings from 117,000 ETH to significantly lower levels suggests repositioning rather than complete exit, indicating continued belief in Ethereum’s long-term value despite near-term caution.