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Norway Boosts Bitcoin Investments Through Sovereign Fund

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by Giorgi Kostiuk

a year ago

  1. Investments in Bitcoin-Related Firms
  2. Bank's Approach and Objectives
  3. Comparison with Other Countries


    4. Norway has enhanced its cryptocurrency exposure through sovereign wealth fund investments in Bitcoin, effectively making every Norwegian own $27 worth of Bitcoin.

    Investments in Bitcoin-Related Firms

    By the end of the first half of June, the sovereign wealth fund had increased its investments in MicroStrategy by $217 million, raising its stake to 0.89% from 0.67%. During the same period, MicroStrategy significantly increased its Bitcoin exposure. The fund has also invested in crypto-related businesses such as Marathon Digital and Coinbase, increasing its stakes in these firms.

    Bank's Approach and Objectives

    According to Technopedia, the fund is not essentially betting on Bitcoin. Its main focus is on investing in companies like MicroStrategy, which have direct exposure to the digital currency. K33Research analyst Vetle Lunde noted that the fund aims to diversify risks through investments in well-performing companies rather than purchasing cryptocurrency directly. According to Lunde, the fund indirectly owns 2,446 BTC, an increase of 938 BTC from December 2023.

    The growth likely originates from pre-determined algo-based sector weighting and risk diversification.Vetle Lunde

    Comparison with Other Countries

    Norway's sovereign fund holds 2,446 Bitcoin, equivalent to $27 per person. While the country has indirect exposure to Bitcoin, authorities do not support cryptocurrency mining due to energy consumption and climate sustainability concerns. Norway's approach is not unique—many countries are also increasing their Bitcoin reserves. The US and UK confiscate cryptocurrency as part of efforts to crack down on illegal activities, while countries like El Salvador are deliberately increasing their Bitcoin reserves.

    Norway’s investments in Bitcoin-related companies demonstrate a strategic approach to risk diversification and capital growth. Despite indirect exposure, the country continues to explore growth opportunities through innovative financial instruments, while other nations follow a similar path, employing various strategies to accumulate digital assets.

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