Norway’s Gov’t Wealth Fund to Reinvest $90BN; Is Bitcoin an Option?
Anyone who has invested in Bitcoin since the market bottomed out after the Mt. Gox collapse has made a small fortune in ROI, depending upon their timing. The Norway government is looking for a brand new bag for their wealth fund management. Here’s why ‘digital gold’ Bitcoin should be an option to consider.
Norway’s Fund Looking for Riskier Bets, High Yields
Normally, a national government investing in something as avant-garde and aggressive as Bitcoin would be unheard of, but in this case, a play here would not be a bad move.
For starters, Norway’s sovereign wealth fund — the biggest in the world — is looking to invest $90 billion USD into stocks and equities, looking to take on more high-risk, high-yield investments to their portfolio, raising their split from 60% to 70% in equities.
Can you name anything over the last two years that exemplifies success in that investment class that has done better than Bitcoin?
Bitcoin bottomed out after the collapse, at less than $200 USD in value in mid-January, 2015. Since then, it is up almost 600% ever since. What stocks with a future are doing that? No one is saying throw 10% of your portfolio directly into BTC, but why not diversify into new technologies and global finance?
“The Norwegian government wants to reduce the share of the fund that Oslo is allowed to use in budgets,” says the Financial Times of London. “Under a rule introduced in 2001, the government is allowed to take up to 4 per cent of the fund each year, which is meant to equal the real return from investments. This would be reduced to a maximum of 3 percent under the new proposal as the outlook for returns has fallen.”
3-4%? The outlook for returns has fallen? Is Bitcoin’s outlook falling anywhere? 2017 has bred nothing but optimism for Bitcoin investors, and the only real question is if BTC will double in value again, or just show a 50% return for the year. Ethereum is looking at even better prospects, so a stake there would also be a wise move.
Steen Jakobsen, the Chief Economist at Saxo Bank — yes, the same Saxo Bank that’s predicting Bitcoin to more than double in price this year — has noticed this move and weighed in on Twitter:
Either very smart or very bad decision (considering the timing) pic.twitter.com/DOvGAVIIQW
— Steen Jakobsen (@Steen_Jakobsen) February 17, 2017
Bitcoin’s Day in the Sun is Coming
This is all ‘pie in the sky,’ and we all know this is less probable than a Patriots comeback victory in Super Bowl LI. Until the Bitcoin protocol gets the upgrades it needs to add more capacity, like Segregated Witness and The Lightning Network, it is hard to bet on the network, at that scale, from the mainstream. If I was advising them, I would say look at it after the protocol is sufficiently upgraded. When that would happen is anybody’s guess right now, however.
That said, some ‘whale,’ nation, or massive hedge fund, most probably after an ETF is generated for Bitcoin investment, will make a major move on Bitcoin. Just investing on the billion-dollar scale would generate an instant market shift and short-term return. The investment would literally fund itself, and create its own windfall in the $17 billion market.
In about three weeks, we could see this play out on Wall Street. If The (Winklevoss) Twins get the go ahead, get your popcorn ready.
Should governments seriously start considering Bitcoin as an investment? Share your thoughts below!
Images courtesy of Twitter, Shutterstock