NBIM’s Significant Increase in Indirect Bitcoin Exposure
In a recent update from Vetle Lunde, the Head of Research at K33 Research, it was revealed that Norges Bank Investment Management (NBIM), which manages Norway’s sovereign wealth fund, has witnessed a substantial rise in its indirect exposure to Bitcoin (BTC). This increase, recorded at 153% in 2024, underscores the growing integration of Bitcoin into diversified investment portfolios.
Growing Indirect Bitcoin Holdings of NBIM
The expansion of Bitcoin adoption is not restricted to direct investments; financial instruments are also reflecting this trend. NBIM’s Bitcoin exposure, which was 2,446 BTC as of June 30, 2024, has climbed to 3,821 BTC. This significant rise highlights the evolving nature of investment strategies that incorporate digital assets.
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Yearly Bitcoin Exposure Growth
Over the span of a year, NBIM’s BTC exposure surged from 1,507 BTC at the close of 2023 to 3,821 BTC by the end of 2024, marking a notable 153% increase. According to Lunde, this growth is not the result of targeted BTC acquisitions but is a byproduct of NBIM’s strategic sector-based investment approach. Lunde emphasized:
“NBIM’s indirect exposure to Bitcoin exemplifies how BTC is becoming an integral part of diversified portfolios, whether by design or not. This growth signifies the maturation of the market as Bitcoin secures its place in diversified investment strategies.”
Lunde further noted NBIM’s increased investments in Bitcoin-affiliated companies such as Riot Platforms and Japan-based Metaplanet. Despite previous expectations of reduced BTC exposure, NBIM has maintained substantial investments in firms like MicroStrategy.
By December 31, 2024, Norway’s per capita indirect exposure to Bitcoin was valued at $64. In terms of USD, NBIM’s BTC exposure skyrocketed from $23 million in 2020 to $356 million in 2024.
Rising Bitcoin Adoption Among Sovereign Wealth Funds
While corporate adoption of Bitcoin has been on the rise, sovereign wealth funds globally are also increasingly embracing the leading cryptocurrency. A Fidelity Digital Assets report suggests that the next wave of crypto expansion will be driven by government treasuries and nation-states adopting Bitcoin.
Predictions and Legislative Developments
In October 2024, David Bailey, CEO of Bitcoin Magazine, forecasted an increase in nation-state adoption of Bitcoin in the coming years. He noted an “undercurrent” of adoption happening discreetly across the globe.
In legislative developments, a Kansas state senator recently introduced a bill advocating for the allocation of up to 10% of public employee retirement funds into Bitcoin ETFs. Similarly, North Dakota has proposed legislation aimed at expanding digital asset investments, including Bitcoin, as a hedge against inflation.
Additionally, a Bitwise report suggests that Bitcoin’s unique characteristics render it an effective form of ‘portfolio insurance’ against sovereign default risks. As of the latest update, Bitcoin is trading at $101,868, experiencing a slight dip of 0.6% over the past 24 hours.
