Key Points:
Norges Bank lost $40 billion in Q1 2025, mainly due to falling US tech stocks, highlighting the dangers of concentrated investments.
Its indirect Bitcoin exposure reached $356 million, raising concerns about potential sell pressure amid a global trade war and recession fears.
Abu Dhabi’s $437 million Bitcoin ETF investment signals rising interest from sovereign wealth funds in Bitcoin as a hedge.
Norges Bank Investment Management, overseeing Norway’s $1.7 trillion sovereign wealth fund, reported a $40 billion loss in Q1 2025. The primary driver was a sharp decline in US-listed tech stocks, exposing the fund’s vulnerability to concentrated market positions.
By the end of 2024, Norges Bank held indirect exposure to 3,821 BTC through its investments in companies with significant Bitcoin holdings — potentially adding sell pressure risks at a time of escalating geopolitical tensions and looming recession threats.
Could Bitcoin Be the Next Hedge?
With rising global uncertainty, there’s speculation about whether Norges Bank might deepen its Bitcoin exposure, either by increasing stakes in Bitcoin-related companies or investing in spot Bitcoin ETFs.
However, this seems unlikely for now. Historically, Norges Bank has avoided traditional hedges like gold — Norway sold all its gold reserves by early 2004 when prices were under $400. Since then, gold has outperformed the S&P 500 by 280%, but Norges Bank remained committed to stocks, bonds, and real estate, including renewable energy and logistics properties worldwide.
Currently, equities make up 71.4% of the fund’s investments. If the global trade war worsens, the fund could face further significant losses.
Despite the recent $40 billion setback, Norges Bank generated $222 billion in profits in 2024. The first quarter’s 1.6% stock portfolio loss remains relatively small, partly because the fund is largely "index-driven," closely tracking the FTSE Global All Cap Index. Still, this exposes about 65% of its investments to North American companies.
Deputy CEO Trond Grande mentioned there is some room for active management, and in fact, Norges Bank has kept its exposure to US tech stocks below the benchmark for the past 18 months.
Companies like Strategy, Marathon Digital Holdings, Coinbase, and Riot Platforms — all with large Bitcoin reserves — contributed to the fund’s $356 million indirect Bitcoin exposure at the end of 2024.
Would a Bitcoin ETF Make Sense?
Technically, buying a spot Bitcoin ETF would require changes to Norges Bank’s investment mandate, making it an unlikely move in the short term. However, increasing indirect exposure — by investing in Bitcoin-heavy companies — remains possible. So far, though, there’s no clear sign the fund plans to shift strategies.
Norges Bank CEO Nicolai Tangen did hint on April 24 that the fund will boost investments in US stocks, but no mention was made of Bitcoin-specific moves.
Meanwhile, other sovereign wealth funds are embracing Bitcoin more openly. Abu Dhabi’s Mubadala Investments revealed a $437 million position in BlackRock’s iShares Bitcoin ETF (IBIT). Similarly, the State of Wisconsin Investment Board holds a $321 million stake in spot Bitcoin ETFs.
These moves highlight a growing trend among major funds: using Bitcoin exposure as a strategic hedge in uncertain times.
Disclaimer:
This article is for general information only and does not constitute legal or investment advice.
Rashid Sardar 😊
