World-largest State Pension Fund “Unintentionally” Buys Bitcoin

The world’s largest sovereign wealth fund, the Government Pension Fund of Norway (NBIM), has increased its indirect Bitcoin holdings significantly in the first half of 2024, from 1507 BTC at the end of 2023, to 2446 BTC on June 30 2024 — an increase of around 62% in just 6 months. 

The fund currently has approximately AU$2.5 trillion worth of assets under management, that’s just under AU$500,000 for every Norwegian citizen.

Vetle Lunde, a Senior Analyst at crypto research firm K33, doesn’t believe this increase is part of a deliberate strategy on the part of the Norwegian Government to increase Bitcoin holdings. Instead, Lunde says the increase reflects the fund’s diversification into different sectors of the global economy and the growing integration of Bitcoin into the investment portfolios of many companies. 

Essentially, according to Lunde, the fund now just owns more shares in companies that own Bitcoin, but the decision to invest in these companies wasn’t related to their Bitcoin holdings. The fund’s total indirect Bitcoin exposure is now valued at just under AU$220 million.

Related: Bitcoin Adoption Accelerates as Michigan State Pension Fund Snatches up $6.6 Million in BTC

Analyst Says Increase Unintentional, But Still Encouraging

Posting on X / Twitter last week, Lunde suggested the increase is likely the result of a predetermined diversification strategy that has nothing to do with Bitcoin specifically:

The growth likely originates from pre-determined algo-based sector weighting and risk diversification. It’s unlikely to stem from an intentional choice to amass exposure.

Vetle Lunde, Senior analyst at K33

Lunde added that an intentional strategy would likely lead to a much more aggressive increase in Bitcoin exposure:

If increased BTC exposure was the target, we’d see more evidence of direct exposure initiatives (and significantly larger exposure).

Vetle Lunde, Senior analyst at K33

For perspective, if the fund intentionally tried to increase its Bitcoin exposure to say 1%, that would be valued at around AU$25 billion — over 100 times more than its current Bitcoin exposure.

Despite believing the Norwegian sovereign wealth fund’s Bitcoin accumulation is unintentional, Lunde still thinks it’s a good sign for Bitcoin as it shows that the OG crypto is maturing and becoming more integrated into the mainstream economy:

Regardless, it perfectly illustrates how bitcoin is maturing as an asset and getting woven into any well-diversified portfolio!

Vetle Lunde, Senior analyst at K33

Increase Due to BTC Accumulation by MicroStrategy and Others

Lunde attributes much of the increase in the fund’s Bitcoin exposure to the treasury strategies of companies like MicroStrategy, which has a heavy focus on Bitcoin accumulation. Lunde added that the Norwegian fund now has a per capita Bitcoin exposure of 44,476 sats (around US$27):

Thanks to corporate BTC treasury strategies advanced by @saylor (Michael Saylor of MicroStrategy), @jack (Jack Dorsey of Block), @fgthiel (Fred Thiel of Marathon Digital Holdings), and others, the Norwegian indirect sat per capita exposure stood at 44,476 sats ($27) by the end of H1 2024.

Vetle Lunde, Senior analyst at K33

Related: SEC Greenlights MicroStrategy ETF, Breaks Record on Day One of Trading

Lunde also shared an itemised list of where the fund’s indirect BTC exposure comes from and the increases in these holdings:

• MicroStrategy exposure increased from 0.67% to 0.89%. MicroStrategy itself accumulated an additional 37,181 BTC in the first half of 2024
• Marathon Digital Holdings exposure increased from 0% to 0.82%
• Coinbase exposure almost doubled from 0.49% to 0.83%
• Block Inc. exposure increased slightly from 1.09% to 1.28%.