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Norway’s Oil Fund Is Buying Bitcoin

Norway’s sovereign wealth fund holds close to 600 Bitcoin through a 1.51-percent stake in MicroStrategy—a business intelligence firm that recently made headlines with its Bitcoin buying spree. The amount of Bitcoin the fund is exposed to through its stake is worth about $6.3 million at current prices.

According to Arcane Research, which revealed the figures, BlackRock and Vanguard are also holders of Bitcoin through their MicroStrategy stakes, which suggests some mainstream investors such as the fund and the two asset management giants may be more exposed to the cryptocurrency than one might expect.

The Government Pension Fund Global, as the sovereign wealth fund is officially known, has assets in excess of $1 trillion, most of this made through investments made possible by Norway’s oil wealth. However, the fund has recently begun a shift away from oil holdings in a bid to reduce its exposure to a highly volatile industry.

As part of this effort, the fund said last year it would divest some of its oil stocks. Initially, it planned to divest all its oil holdings, which amounted to some $40 billion last year, but it ended up divesting only some $6 billion worth of assets, all in pure-play oil companies, while keeping its stakes in integrated oil industry players.

This divestment did not shield the fund from the effects of the coronavirus pandemic that rattled all industries across the world. For the first half of this year, the Government Pension Fund Global reported a loss of $21 billion, with returns swinging into the negative and averaging -3.4 percent over the period.

Also during the first half, the Norwegian government tapped the fund to prop up the country’s economy, using $41 billion for this. This accounted for 4.2 percent of the fund, which made it a rarely high withdrawal, highlighting the gravity of the effects that the pandemic had on even an economy as strong as Norway’s.

By Michael Kern for Oilprice.com

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