Norwegian Sovereign’s $144M Bitcoin Exposure ‘Unintentional’: Analyst

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Norway’s Government Pension Fund Global, commonly referred to as the Norwegian sovereign wealth fund, has significantly increased its indirect exposure to Bitcoin, now exceeding a valuation of $144 million. However, according to K33 Research senior analyst Vetle Lunde, this growth may not be a result of a deliberate strategy but rather an outcome of automated investment processes.

An “Unintentional” Act

On August 14, Lunde shed light on this development following the release of the fund’s financial report for the first half of 2024. He pointed out that the surge in Bitcoin exposure is likely the result of pre-determined algorithmic adjustments in sector weighting and risk diversification, rather than a conscious decision by the fund’s managers to accumulate more Bitcoin.

“If this increase were intentional, we would likely see more concrete actions, such as direct purchases or strategic shifts specifically targeting Bitcoin,” Lunde remarked. Instead, the fund’s Bitcoin exposure, which has grown by 160.7% since December 2023, seems to be an unintended consequence of broader investment strategies. Currently, the fund holds approximately 2,446 Bitcoins, valued at around $144.8 million as of the latest data.

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Bitcoin is Growing

This development, according to Lunde, underscores the growing maturity of Bitcoin as an asset. “Bitcoin is increasingly being integrated into well-diversified portfolios, almost as a default option in today’s investment environment,” he noted.

This maturation is evident in the way Bitcoin exposure is being woven into the fund’s broader investment strategy, particularly through its holdings in companies that are heavily invested in the cryptocurrency.

For instance, the fund has adjusted its shareholdings in MicroStrategy, a company known for its substantial Bitcoin reserves, to account for 0.89% of its total portfolio. This adjustment is just one part of a broader strategy that has seen the fund increase its stakes in other crypto-related companies, including the cryptocurrency exchange Coinbase and Jack Dorsey’s fintech firm Block Inc., formerly known as Square. Additionally, the fund has taken a new position in Marathon Digital, a company involved in Bitcoin mining.

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Lunde highlighted that these moves have effectively resulted in each Norwegian citizen indirectly owning $27 worth of BTC, or 44,476 satoshis, by the end of the first half of 2024.

A Broader Trend

This trend is not isolated to Norway. Just days later, on August 16, South Korea’s National Pension Service (NPS), the third-largest public pension fund in the world, made a move that further emphasizes Bitcoin’s growing role in global finance. The NPS purchased nearly $34 million worth of shares in MicroStrategy, signaling a continued shift toward integrating Bitcoin exposure into traditional financial strategies.

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