As Bitcoin adoption continues to gain momentum globally among countries and traditional financial (TradFi) institutions, Norway’s sovereign wealth fund, Norges Bank Investment Management (NBIM), has emerged as a stealth holder of the largest cryptocurrency on the market.
Unexpected Bitcoin Whale?
According to a recent analysis by K33 Research analyst Vetle Lunde, NBIM, which manages the Norwegian Government Pension Fund Global, now indirectly owns 2,446 Bitcoin (BTC), representing a significant increase of 938 BTC from the end of 2023.
Lunde explained that growth likely originates from pre-determined algo-based sector weighting and risk diversification. “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).”
Despite the passive nature of NBIM’s Bitcoin accumulation, the fund’s growing indirect exposure to the cryptocurrency underscores Bitcoin’s continued maturation as an asset class, Lunde said.
Thanks to corporate BTC treasury strategies advanced by Michael Saylor, CEO and founder of Microstrategy, Jack Dorsey, and others, the Norwegian indirect sat per capita exposure stood at 44,476 sats ($27) by the end of the first half of 2024.
Tracing NBIM’s Crypto Ties
Lunde’s analysis delves into the specific drivers behind NBIM’s expanding indirect Bitcoin exposure:
- Increased MicroStrategy exposure: From 0.67% to 0.89%. MicroStrategy, a leading business intelligence firm, has been a prominent corporate Bitcoin proponent, accumulating a significant BTC treasury.
- MicroStrategy’s own BTC holdings growth: The company increased its Bitcoin exposure by 37,181 BTC in the first half of 2024.
- Exposure in Marathon Digital: From 0% to 0.82%. Marathon Digital is a prominent Bitcoin mining company that has been amassing BTC on its balance sheet.
- Increased exposure in Coinbase: From 0.49% to 0.83%. As the largest cryptocurrency exchange in the United States, Coinbase’s growing prominence has translated into increased indirect Bitcoin exposure for NBIM.
- Increased exposure in Block Inc. (formerly Square): 1.09% to 1.28%. The financial services and digital payments company, co-founded by Jack Dorsey, has propounded Bitcoin integration within its ecosystem.
While NBIM’s indirect BTC exposure may not be the result of a deliberate strategy to accumulate the cryptocurrency, as suggested by the analyst, the fund’s growing exposure to BTC is a clear indication of the increasing adoption of BTC for diversification and growth among countries and funds around the world.
As more traditional financial institutions and sovereign wealth funds follow suit, the future integration of Bitcoin into the global financial system appears to be on a steady trajectory, supporting both the token’s price and the overall exposure of other institutions to the crypto market.
When writing, the largest cryptocurrency on the market is trading at $59,490, again losing the $60,000 mark after repeated failed attempts to consolidate above this key level for BTC’s prospects.
Featured image from DALL-E, chart from TradingView.com