Norges Bank, the manager of the world's largest sovereign wealth fund valued at 1.7 trillion USD, recently reported a loss of 40 billion USD in Q1 2025, primarily due to the decline of listed technology companies in the US. As of the end of 2024, Norges Bank indirectly held 3,821 Bitcoin (BTC) through its stock portfolio, raising concerns about potential selling pressure on Bitcoin amid geopolitical instability and the risk of economic recession due to the global trade war.
In this risky environment, can Norges Bank increase investments in Bitcoin-related companies or buy into spot Bitcoin ETFs as a hedge?
Currently, the likelihood of Norway's sovereign wealth fund purchasing Bitcoin ETFs is considered very low, especially since they do not hold any gold. Besides stocks and bonds, Norges Bank primarily invests in retail real estate, industrial sectors, renewable energy, and logistics globally.
Norway sold all of its central bank gold reserves at the beginning of 2004 when gold was still below 400 USD/ounce. Since then, gold has outperformed the S&P 500 index by 280%. Currently, stocks account for 71.4% of the fund's portfolio, posing a significant risk of large losses if the trade war continues to escalate.
In 2024, Norges Bank recorded a profit of 222 billion USD, and the stock portfolio only decreased by 1.6% in the first quarter of 2025. According to CEO Nicolai Tangen, this investment fund primarily operates according to indices, specifically the FTSE Global All Cap Index. Although this index includes over 7,100 global stocks, the capitalization weighting means that 65% of the portfolio is concentrated in North American companies.
Deputy CEO Trond Grande stated that the fund still has room for active investment and has reduced its allocation in US technology stocks below the reference level for the past 18 months. Some investments like Strategy, Mara Holdings, Coinbase, and Riot Platforms – all companies holding large amounts of Bitcoin – have resulted in Norges Bank having an indirect exposure worth 356 million USD to Bitcoin as of the end of 2024.
According to simulation data, if Norges Bank allocated 5% to Bitcoin since 2018, the stock portfolio could have increased by an additional 56%.
The possibility of buying Bitcoin ETFs remains open
Technically, Norges Bank would find it difficult to buy spot Bitcoin ETFs without changing its operational regulations. However, increasing the allocation of companies holding Bitcoin in its portfolio is entirely feasible. Nevertheless, there are currently no signs indicating that Norges Bank will take this step, although CEO Nicolai Tangen affirmed on April 24 that the fund will enhance its investment in US stocks.
In related news, Mubadala Investments – one of the sovereign wealth funds of Abu Dhabi – currently holds 437 million USD in shares of BlackRock's iShares Bitcoin ETF (IBIT). The Wisconsin State Investment Board has also invested 321 million USD in spot Bitcoin ETFs, indicating a trend among large funds increasingly viewing cryptocurrencies as a strategic hedge.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct thorough research before making decisions. We are not responsible for your investment decisions.
