Emily Walker
Recent insights shared by Vetle Lunde, the Head of Research at K33 Research, reveal that Norway’s sovereign wealth fund, Norges Bank Investment Management (NBIM), experienced a remarkable 153% increase in its indirect Bitcoin (BTC) exposure throughout 2024.
Growth in NBIM’s Indirect Bitcoin Exposure
The surge in Bitcoin adoption by corporations and governments is now evident in financial assets that may not have a direct link to the cryptocurrency. As of June 30, 2024, NBIM’s indirect Bitcoin holdings rose from 2,446 BTC to 3,821 BTC.
From the perspective of annual growth, NBIM’s BTC exposure leaped from 1,507 BTC at the close of 2023 to 3,821 BTC by the end of 2024, marking a significant increase of about 153%. Lunde explained that this uptick arises from the fund’s sector-specific investment approaches rather than a conscious decision to invest in Bitcoin. He mentioned:
NBIM’s indirect exposure exemplifies how Bitcoin is now an integral element of well-diversified portfolios, illustrating the evolution of the market and Bitcoin’s incorporation into diverse investment strategies, often unintentionally.
Lunde further emphasized that Bitcoin has reached a maturity level that makes it a crucial aspect of major institutional investment portfolios, regardless of intentional inclusion.
Additionally, Lunde noted that NBIM has broadened its investments in Bitcoin-connected companies, including mining operations like Riot Platforms and the Japanese entity Metaplanet. Contrary to prior predictions of a decrease in exposure, NBIM has continued to heavily invest in MicroStrategy.
As it stands on December 31, 2024, Norway’s indirect Bitcoin exposure per person amounted to $64. Furthermore, NBIM’s Bitcoin investments in USD have escalated dramatically from $23 million in 2020 to $356 million in 2024.
Growing Bitcoin Adoption Among Sovereign Funds
As corporations increasingly embrace Bitcoin, there is also a notable warming trend towards the cryptocurrency among sovereign funds globally. A report from Fidelity Digital Assets indicates that the adoption of Bitcoin by nations and governmental treasuries could be a catalyst for the next significant phase of crypto growth.
David Bailey, CEO of Bitcoin Magazine, predicted in October 2024 that the acceptance of BTC by nation-states is set to escalate in the future, citing an ongoing and invisible trend towards Bitcoin adoption by governments.
In a recent development, a state senator in Kansas proposed legislation that would permit allocating up to 10% of public employee retirement funds to Bitcoin ETFs. Similarly, a bill in North Dakota seeks to enhance investments in digital assets, including Bitcoin, as an inflation hedge.
Moreover, a Bitwise report asserted that Bitcoin’s characteristics may qualify it as a form of ‘portfolio insurance’ against potential sovereign default risks. As of now, Bitcoin is trading at $101,868, reflecting a 0.6% decrease over the last 24 hours.
