Norway’s sovereign wealth fund lost $40B in Q1— Will it hedge risk by increasing Bitcoin exposure?

1 month ago

Key takeaways:

Norges Bank mislaid $40 cardinal successful Q1 2025 arsenic US tech stocks fell, exposing the hazard of concentrated positions.
The bank’s indirect Bitcoin vulnerability via stocks reached $356 million, raising merchantability unit hazard amid a planetary commercialized warfare and recession concerns.
Abu Dhabi’s $437 cardinal spot Bitcoin ETF involvement shows sovereign wealthiness funds spot Bitcoin arsenic a hedge.

Norges Bank, Norway’s $1.7 trillion sovereign wealthiness fund, reported a $40 cardinal nonaccomplishment successful the archetypal 4th of 2025, with astir of the diminution caused by a driblet successful the worth of US-listed exertion companies. Norges Bank besides indirectly owned 3,821 BTC done its banal marketplace investments by the extremity of 2024, presenting a imaginable merchantability unit hazard to Bitcoin, particularly erstwhile considering the socio-political uncertainty and the hazard of an economical recession caused by the planetary commercialized war.

In specified times, could Norges Bank summation its investments successful Bitcoin-related companies oregon adjacent bargain spot Bitcoin exchange-traded funds (ETFs) arsenic a mode to hedge risk?

For now, it seems improbable that Norway’s concern money would see buying a Bitcoin ETF, particularly since the money does not clasp immoderate gold. Besides stocks and bonds, Norges Bank invests successful existent estate, including retail, industrial, renewable energy, and logistics properties worldwide.

Norway sold each of the cardinal bank’s golden by aboriginal 2004, erstwhile golden was trading beneath $400. Since then, golden has outperformed the S&P 500 by 280%. Equities present marque up 71.4% of the fund’s full investments, truthful if the planetary commercialized warfare continues, important losses could occur.

Norges Bank investments generated $222 cardinal successful profits successful 2024, and its banal marketplace portfolio dropped by lone 1.6% successful the archetypal 4th of 2025. Norway’s sovereign wealthiness money is “mainly index-driven,” according to CEO Nicolai Tangen, specifically pursuing the FTSE Global All Cap Index.

Although this scale includes implicit 7,100 stocks from some developed and emerging markets, it is based connected marketplace capitalization, which means 65% of the vulnerability is to North American companies. But, according to Norges Bank Deputy CEO Trond Grande, determination is immoderate flexibility for progressive investment, and their vulnerability to US-listed tech stocks has been beneath the benchmark for the past 18 months.

Some of these holdings, specified arsenic Strategy, Mara Holdings, Coinbase, and Riot Platforms, clasp ample amounts of Bitcoin (BTC) connected their equilibrium sheets. As a result, adjacent if not intentional, the sovereign wealthiness money had a $356 cardinal indirect vulnerability to Bitcoin astatine the extremity of 2024.

Data shows a 5% hypothetical allocation successful Bitcoin backmost successful 2018 would person boosted the fund’s equities benchmark show by 56%.

Buying Bitcoin ETFs seems unlikely, but indirect vulnerability remains possible

Technically, it seems improbable that Norges Bank could bargain into the spot Bitcoin ETF without changing the fund’s mandate. However, expanding vulnerability to companies with important Bitcoin holdings appears possible. Still, determination is nary motion of specified a move, though Nicolai Tangen stated connected April 24 that the money volition summation investments successful US stocks.

The information that Mubadala Investments, 1 of Abu Dhabi’s sovereign wealthiness funds, held a $437 cardinal involvement successful BlackRock’s iShares Bitcoin ETF (IBIT) helps physique a lawsuit for specified investment. Similarly, the State of Wisconsin Investment Board held $321 cardinal successful spot Bitcoin ETFs, showing the increasing usage of cryptocurrency arsenic a hedge.

This nonfiction is for wide accusation purposes and is not intended to beryllium and should not beryllium taken arsenic ineligible oregon concern advice. The views, thoughts, and opinions expressed present are the author’s unsocial and bash not needfully bespeak oregon correspond the views and opinions of Cointelegraph.

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