Norway’s $40B Loss Sparks Bitcoin Hedge Talk: Could Sovereign Wealth Funds Turn to Crypto?

Norway’s $40B Loss Sparks Bitcoin Hedge Talk: Could Sovereign Wealth Funds Turn to Crypto?

Norges Bank Faces Tough Questions After Massive Q1 Loss

Norway’s sovereign wealth fund, managed by Norges Bank, reported a massive $40 billion loss in the first quarter of 2025, igniting fresh discussions about whether Bitcoin (BTC) could become a more strategic part of its investment mix.

While direct investment in Bitcoin ETFs appears unlikely for now, the fund’s growing indirect exposure to Bitcoin-linked companies suggests a subtle shift might already be underway.

$40 Billion Wipeout Raises Alarms Over Heavy Tech Exposure

The world’s largest sovereign wealth fund, worth $1.7 trillion, saw heavy losses largely due to the declining value of U.S. tech stocks.
Despite generating $222 billion in profits in 2024, the 1.6% dip in its stock portfolio in Q1 2025 exposed just how vulnerable Norges Bank is to the tech sector’s volatility.

At the same time, the fund’s indirect Bitcoin exposure — valued at approximately $356 million — through tech-heavy holdings like Coinbase, Strategy, Mara Holdings, and Riot Platforms—has raised important questions about Bitcoin’s growing role as a financial hedge.

Could Norway use Bitcoin to shield itself from future shocks?
The prospect seems remote for now, but it’s impossible to ignore Bitcoin’s rising profile in sovereign portfolios worldwide.

Why Direct Bitcoin ETF Investments Seem Unlikely—For Now

Norges Bank is unlikely to directly purchase Bitcoin ETFs anytime soon, mainly because of its strict investment mandate.
The fund notably does not hold any gold, having sold off Norway’s gold reserves back in 2004 — a decision that, in hindsight, looks costly as gold has outperformed the S&P 500 by 280% since then.

Today, 71.4% of Norges Bank’s investments are in equities, making the fund highly sensitive to global market turbulence, including ongoing trade wars and recession risks.

Even so, Deputy CEO Trond Grande has acknowledged that the fund retains some flexibility for active investments, meaning increased Bitcoin-linked exposure via company stocks remains very much on the table.

Other Sovereign Wealth Funds Are Already Buying Bitcoin ETFs

The idea of sovereign wealth funds embracing Bitcoin is no longer theoretical.

• Abu Dhabi’s Mubadala Investments holds a $437 million stake in BlackRock’s iShares Bitcoin Trust (IBIT).

• The State of Wisconsin Investment Board has committed $321 million to spot Bitcoin ETFs.

Such moves underline a growing institutional acceptance of Bitcoin as a hedge against global uncertainty.

If Norway’s wealth managers follow similar paths—even indirectly—Bitcoin’s role as a cornerstone of sovereign finance could be cemented much faster than anyone expects.

Key Takeaways:

• Norway’s sovereign fund lost $40B in Q1 2025 due to tech stock declines.

• Indirect Bitcoin exposure sits at $356 million through tech-related holdings.

• Direct Bitcoin ETF purchases seem unlikely unless the fund’s mandate changes.

• Other sovereign funds are already using Bitcoin ETFs as a hedge against risk.

As markets grow more volatile and traditional assets falter, Bitcoin’s case as a safe harbor asset only strengthens—even in the world’s largest sovereign portfolios.