Norwegian Sovereign Wealth Fund Increases Crypto Holdings, Giving Every Citizen an Indirect $27 Bitcoin Stake Leave a comment

Second, Bitcoin has fallen more than 50% several times in its relatively short history, and similar drawdowns are probable in the future. The hedge fund managers listed below sold shares of Nvidia in the first half of 2024, and they started positions in the iShares Bitcoin Trust (IBIT -0.58%), an exchange-traded fund that tracks Bitcoin (BTC 0.73%). As of the first half of 2024, bitcoin’s value had surged by more than 30%, buoyed by the performance of tech stocks and new regulations that allow bitcoin to be included in exchange-traded funds (ETFs).

With the recent SEC approval of 11 spot bitcoin ETFs, the bitcoin ETF marketplace has become more crowded. However, history shows that many ETFs ultimately change to a different strategy or de-list altogether. BITB also boasts a hefty level of assets under management thanks to a short-term fee waiver that made it free to trade until the fund hit $1 billion in AUM. However, even the baseline, post-waiver fee of 0.20% is attractive, so many investors may leave cash in BITB.

The arrival of long-awaited spot bitcoin ETFs on Wall Street this year have already opened up bitcoin to a new cohort of investors who previously regarded it as an unproven store of value. ”It perfectly illustrates how bitcoin is maturing as an asset and getting woven into any well-diversified portfolio,” said K33 Research analyst Vetle Lunde in an Aug. 14 post on X. Risk-tolerant investors comfortable with that should consider putting a small portion of their portfolios into Bitcoin, either directly or through the iShares Bitcoin Trust. How small is a personal preference, but I would personally cap my investment around 5% of my portfolio.

Norway’s immense oil and gas profits capitalized its sovereign wealth fund, which has ballooned from $23 billion in 1998 to $1.7 trillion today. Norges Bank is as well capitalized as sovereign assets like Saudi Aramco, China Investment Corporation, Abu Dhabi Investment Authority, SAFE Investment Company, or Kuwait Investment Authority. Along with big tech stocks, Bitcoin delivered enormous returns to investors this year, coinciding with the quadrennial Bitcoin supply halving and the launch of several ETF products in the United States following approval from the U.S. During the first half of the year, MicroStrategy also added 37,181 BTC to its reserves, which contributed to the NBIM’s indirect exposure to the leading crypto. NBIM’s indirect exposure has risen from 938 BTC at the end of December to 2,446 BTC.

The wealth fund also poured money into mining firm Marathon Digital, with its exposure moving from 0% to 0.82% in H1 2024, crypto exchange Coinbase (from 0.49% to 0.83%) and Block, Inc (from 1.09% to 1.28%). Instead, the wealthy Northern European country’s growing exposure to Bitcoin comes from rising allocations in companies like MicroStrategy, Block and Marathon Digital, who hold large amounts of Bitcoin in their corporate treasuries. The fund grew by 8.6% in the first half of 2024, with equity investments enjoying a 12% increase. Nobody knows what the future of bitcoin ETFs, which are volatile securities, will be.

Norway increased its holdings of MicroStrategy stock from 0.67% to 0.89% in the first half of 2024, while MicroStrategy increased its Bitcoin exposure by 37,181 Bitcoin over the same period. In total, Norway’s investment bank now owns 2,446 BTC, worth around $142.9 million. On a per capita basis, Lunde says this is the equivalent of $27 for each of Norway’s 5.5 million residents.

By increasing its holdings in crypto exchanges like Coinbase, MarathonStrategy, Block Inc., and Marathon Digital, the investment bank has grown its indirect stake in Bitcoin by 62% in the first half of the year. One trend to watch for is that the new spot offerings have caused many shareholders to move some assets out of the older funds, into their newer cousins. Funds that fail to maintain a sufficient amount of assets under management will find it hard to stay in business. That meant it lacked the highly liquid, smooth redemption mechanism that ETFs enjoy. And as a result, shares often traded at a big premium or discount to the actual value of the underlying bitcoin. Investors are understandably reluctant to pay, say, $1 for 90 cents worth of assets.

Shaw rank among the 15 best-performing hedge funds in history as measured by net tnorwegian-btc.fund gains since inception. However, all four money managers still have exposure to Nvidia, so it would be wrong to assume they have completely lost conviction in the AI chipmaker. Artificial intelligence (AI) is one of the hottest themes on Wall Street, and Nvidia has been one of the hottest stocks. Its share price surged 175% over the last year because the company dominates the market for AI chips. Bitcoin news portal providing breaking news, guides, price analysis about decentralized digital money & blockchain technology.

The Central American country, where Bitcoin is legal tender, now has reserves of 5,800 Bitcoin, worth roughly $339 million—working out at almost $54 per citizen. Republican presidential contender Donald Trump has advocated using its holdings as the building block of a strategic Bitcoin reserve. The US Government holds just over $12.5 billion worth of Bitcoin, per BitcoinTreasuries, about 1% of the world supply. Many countries hold large reserves of Bitcoin, but it’s often not an intentional investment decision.

This increase is the result of the NBIM upping its exposure to some of the biggest businesses in the Web3 space, according to Lunde. Norway’s exposure to Bitcoin through crypto-related businesses could extend beyond the country’s borders even though it isn’t as direct as El Salvador’s. Unlike Norway, this country directly bought cryptocurrencies, raising its holdings to $54 per citizen.

The SEC approved spot Bitcoin ETFs in January, but they have already made good on their promise to unlock demand. The iShares Bitcoin Trust reached $10 billion in assets faster than any other ETF in history, according to The Wall Street Journal. Additionally, I’ve already mentioned four successful hedge fund managers that own shares of the iShares Bitcoin Trust, but 592 institutional investors reported positions in the second quarter, up from 436 in the first quarter. In contrast to these countries, where bitcoin holdings are often the result of legal actions rather than investment strategies, El Salvador has taken a different approach. This move has also shown how financial management and investing principles are evolving quickly in today’s digital age. It demonstrated why cryptocurrencies are valuable components of a diversified, long-term investment portfolio.

A bitcoin ETF is an exchange-traded fund that invests primarily in assets related to the original cryptocurrency, bitcoin. ETFs sell shares to investors on the trading news open market and use the proceeds to build a portfolio of assets. In order to generate a return on Norway’s governmental assets — historically, 6.3% since 1998 — its central bank-linked fund buys equity in many listed companies which are index constituents.

As has often been the case throughout cryptocurrency’s short history, many other cryptocurrencies—often called altcoins, due to them being alternative coins to bitcoin—have risen in value in lockstep with bitcoin’s bull run. It has struggled to hold shareholders’ interest amid the current bull market, but it is positioned to return to favor if bitcoin enters a bear market in the future. Sovereign wealth funds, such as those run by Kuwait and Saudi Arabia, are talking to BlackRock about … As its market capitalization has increased, MicroStrategy is also striving for future inclusion in major indices like the S&P 500 or Nasdaq 100.