Bank

2024

Bitcoin

<h3 id="strong-norway-has-increased-its-bitcoin-exposure-through-investments-made-by-its-sovereign-wealth-fund-into-the-digital-currency-effectively-making-every-norwegian-own-27-bitcoin-the-fund-which-is-managed-by-norges-bank-investment-management-nbim-achieved-this-through-its-investments-in-firms-with-direct-exposure-to-bitcoin-strong">Norway has increased its Bitcoin exposure through investments made by its sovereign wealth fund into the digital currency, effectively making every Norwegian own $27 Bitcoin. The fund, which is managed by Norges Bank Investment Management (NBIM), achieved this through its investments in firms with direct exposure to Bitcoin.</h3> 
By the end of the first half of June, the sovereign wealth fund had injected $217 million into MicroStrategy, increasing its stake in the company to 0.89% from 0.67%. During the same period, MicroStrategy increased Bitcoin exposure by 37.181 Bitcoin. 
<h3 id="norway-pours-money-into-crypto-related-firms-via-its-wealth-fund">Norway pours money into crypto-related firms via its wealth fund</h3> 
During the last 12 months, the investment bank bolstered its MicroStrategy investments, which started in 2008. The fund however only has 0.45% voting rights. 
The fund reportedly poured capital in crypto-related businesses like Marathon Digital, increasing its exposure to 0.82% from 0%. The investment bank also bought shares in crypto exchange Coinbase, increasing exposure to 0.83% from 0.49% while it also increased its stake in Block Inc. to 1.28% from 1.09%. These investments improved the fund’s stake in Bitcoin by 62%. 
According to <a href="https://www.techopedia.com/news/norways-growing-bitcoin-exposure-through-microstrategy" rel="nofollow noopener" target="_blank">Technopedia</a>, &nbsp;the bank is not essentially betting on Bitcoin. Its efforts are, however, focused on MicroStrategy, which holds Bitcoin with the broader goal of investment into businesses that have a direct goal of investing companies with direct exposure to the digital currency. 
In an <a href="https://x.com/VetleLunde/status/1823634527157162282" rel="nofollow" target="_blank">X Post</a>, K33Research senior analyst Velte Lunde breaks down the figures and explains the fund’s Bitcoin exposure, which significantly transformed during the first six months of 2024. 
According to Lunde, the fund’s indirect exposure falls into part of its broader plan to diversify risk. 
<blockquote>
 “It’s unlikely to stem from an intentional choice to amass exposure—if increased BTC exposure was the target, we’d see more evidence of direct exposure initiatives (and significantly larger exposure).” 
 Lunde.
</blockquote> 
Lunde also indicated that the “growth likely originates from pre-determined algo-based sector weighting and risk diversification”. According to the analyst, the objective is to invest in firms that are performing well, not to take a stand on whether Bitcoin is the prospect of money. 
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"> 
 The Norwegian sovereign wealth fund (NBIM) indirectly owns 2,446 BTC, an increase of 938 BTC from December 31, 2023. 
 The growth likely originates from pre-determined algo-based sector weighting and risk diversification. It's unlikely to stem from an intentional choice to amass… <a href="https://t.co/8HBIbemgNU" rel="nofollow" target="_blank">pic.twitter.com/8HBIbemgNU</a> 
 — Vetle Lunde (@VetleLunde) <a href="https://twitter.com/VetleLunde/status/1823634527157162282?ref_src=twsrc%5Etfw" rel="nofollow noopener" target="_blank">August 14, 2024</a>
</blockquote> 
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script> 
<h3 id="like-other-countries-norway-is-building-its-reserves">Like other countries, Norway is building its reserves</h3> 
Norway’s investment fund holds 2,446 Bitcoin worth about $142.9 million, which translates to $27 for each of the country’s 5.5 million people. Although the country has indirect exposure to Bitcoin, which increased during the first half of the year, this does not translate to authorities supporting cryptocurrency. 
Authorities have largely had reservations on crypto mining in the country. While the sovereign wealth fund reaps from MicroStrategy’s Bitcoin holdings, the country has de-campaigned the digital asset especially Bitcoin mining. 
This comes as there are growing concerns over increased energy consumption to power mining operations. Studies have also shown an increase in energy consumption at data centers raising concerns about the climate sustainability of such operations. 
In terms of holding Bitcoin, Norway is not the only country “stashing” the digital currency as many others are doing the same to hedge against volatility. 
According to a Decrypt article, many other countries hold large deposits of Bitcoin with the US government estimated to have about $12.5 billion Bitcoin which is about 1% of global supply. 
This usually come from confiscated cryptos and from crackdowns on illegal activities. The UK also acquires Bitcoin through the same approach and currently holds about $3.5 billion, which it does not sell. 
Another country like El Salvador has recently implemented a policy to deliberately promote Bitcoin and build reserves of the digital asset. The country now has about 5.800 in Bitcoin reserves worth $339 million. This translates to about $54 per individual in that country.

Norway increased its Bitcoin exposure in H1 2024

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