Why are Norwegian and Swiss banks buying MicroStrategy shares?

Central banks in Europe have purchased shares of pro-Bitcoin software firm MicroStrategy, potentially making an indirect bet on the popular cryptocurrency.

According to MSTR shareholder data available on Nasdaq’s official website, the Norwegian and Swiss central banks purchased 1.1 million and 466 thousand MicroStrategy shares, respectively.

It’s unclear why the largest banks in Europe’s two largest economies by gross domestic product would invest in MicroStrategy, but two reasons stand out.

Are banks betting on Bitcoin through MSTR?

One working theory suggests that sovereign financial institutions are bullish on Bitcoin (BTC). MicroStrategy is the largest institutional BTC holder in the US, with crypto assets valued at over $13 billion.

The Tysons Corner-based company began buying Bitcoin in 2020 under chairman and former CEO Michael Saylor. After initial skepticism toward the blockchain currency, Saylor promoted Bitcoin as a store of value, an inflation hedge and a superior digital asset.

Given that MicroStrategy is a major Bitcoin buyer, it is possible that the central banks of Norway and Switzerland are seeking exposure to BTC through MSTR.

This wouldn’t be the first time financial institutions have seemingly played a game like this. In July 2023, banks like Goldman Sachs and asset managers like BlackRock and Fidelity invested millions of dollars in MSTR stock. At the time, Saylor was doubling down on his pro-Bitcoin rhetoric and acting more and more like an institutional BTC evangelist.

Nothingburger

A different view suggests that the two apex banks simply view MicroStrategy as a good investment. Patrick Saner, head of macro strategy at Swiss Re, said there was nothing in the X that suggested a bullish outlook on Bitcoin from Norges Bank and Swiss National Bank.

😂😂😂

This is simply part of the physical index replication strategy that basically all very large institutional investors have and do. This has nothing to do with what many in the comments see as an implied message that Norges or SNB are now bullish on bitcoin or MSTR…

— Patrick Saner (@patrick_saner) August 14, 2024

However, speculators may view the development as a positive for MicroStrategy and Bitcoin adoption. Global BTC adoption has accelerated over the past four years, with El Salvador legalizing BTC and Wall Street spot BTC exchange-traded funds managing over $50 billion in less than a year.

Talk of a strategic Bitcoin reserve has also been on the agenda during the US presidential campaigns. Former President Donald Trump is the leading White House candidate pushing for Bitcoin-friendly policies in America. Under the current administration, crypto voices have argued that the industry suffers from a lack of clear regulations and has faced several unfair lawsuits as a result.

There is hope that the current Democratic ticket, which includes Vice President Kamala Harris and Minnesota Governor Tim Walz, can repair relations with the digital industry. Harris has yet to announce her stance on cryptocurrencies, despite the election being less than three months away.

Despite skepticism about Harris’ crypto policy plan and the crypto community’s support for Trump, industry veterans like Coinbase CLO Paul Grewal have emphasized that crypto should remain a neutral topic.