Dispatch #230: Sovereign wealth funds meet crypto

Market cast 

Turning volatility into opportunity

BTC/USD is currently showing mixed signals across different time frames. The price has slipped below the lower Bollinger Band on the daily chart, suggesting an oversold condition and a prevailing short-term bearish sentiment. Key support levels to monitor include approximately 92,500 and strong round-number support near 90,000. Conversely, as the price recovers, expect significant resistance around 100,000 and 106,500, as well as support from the 50-period SMA and the 20-period SMA (the middle line of the Bollinger Bands).

Amid this technical landscape, the current market conditions offer strategic opportunities. With heightened volatility, effective liquidity management becomes a key consideration. In a dynamic market, approaches that leverage existing collateral for increased exposure or enable liquidity without selling are essential for staying nimble. Tools such as the Nexo Booster and our Credit Lines, for example, enable investors to take advantage of market pullbacks while maintaining flexibility and their core portfolio positions. This is especially important as major cryptocurrencies approach critical thresholds – Bitcoin nearing key support levels for BTC/USD and Ethereum testing strong support around $2,400.

Despite short-term technical pressures, Bitcoin's recent breakout signals and rising market cap dominance reaffirm its resilience and growing reputation as a trusted hedge during periods of macroeconomic uncertainty. These indicators demonstrate that Bitcoin remains a viable opportunity in a rapidly evolving landscape, offering strategic value for investors seeking long-term growth and diversification.

The big idea

Sovereign wealth funds testing the waters

Sovereign wealth funds have long been a strategic tool for nations to preserve and grow their financial assets, offering stability in times of economic uncertainty. Although for countries like the U.S., where budget surpluses are rare, the idea of a sovereign fund sounds rather exotic, during his campaign, Donald Trump flirted with the idea. Last night he signed an executive order on the creation of a U.S. sovereign wealth fund, suggesting that revenues from tariffs and other strategic measures could finance it.

And while some countries are yet to create one, Norway’s sovereign wealth fund has been very active. The Scandinavian nation’s $1.7 trillion fund, the world’s largest, made headlines by boosting its Bitcoin exposure by a staggering 153% to nearly 3,800 Bitcoin in 2024. This significant move underscores a broader institutional shift as some of the world's largest funds seek to diversify their portfolios amid a changing global financial landscape. With traditional assets facing volatility and lower yields, digital assets like Bitcoin are increasingly viewed as an attractive hedge and a diversification tool.

But Norway isn’t alone when it invests globally in various assets, ensuring that Norway’s wealth is preserved for future generations. Other heavyweight sovereign wealth funds are exploring the crypto frontier:

• Qatar Investment Authority (QIA): Rumored to be evaluating digital asset investments as part of its diversification strategy.
• Abu Dhabi Investment Authority (ADIA): With a keen interest in emerging technologies, ADIA is reportedly investigating opportunities in blockchain and crypto.
• Singapore’s GIC and Temasek Holdings: These funds have already made strategic investments in blockchain startups and crypto-related ventures, signaling an openness to digital asset exposure.
• Kuwait Investment Authority (KIA): Discussions around crypto investments have surfaced, reflecting a global trend among sovereign funds to consider digital alternatives.

This wave of institutional interest is more than a passing trend—it’s a signal that sovereign wealth funds are beginning to see crypto not only as a speculative asset but also as a strategic component in a diversified, modern investment portfolio. Stay tuned as these developments coming from some of the wealthiest nations could reshape the asset management landscape over the coming years.

Hot in crypto

Nexo among Crypto Valley’s top 50 companies

Switzerland's Crypto Valley is a leading hub for blockchain and digital asset innovation, known for its progressive ecosystem and regulatory advancements. Nexo has been recognized in the CV VC Top 50 report, highlighting the most influential blockchain and crypto companies in the region. 

This acknowledgment by CV Labs reflects the strength of the industry's ecosystem and its role in shaping the future of digital finance. As a leader in the space, Nexo continues to lead by developing innovative solutions for the next generation of wealth.

The tech age

Thailand to launch token trading platform

Thailand’s Securities and Exchange Commission is set to introduce a distributed ledger technology-based trading platform for securities firms to facilitate digital token trading. With token investments gaining traction, the regulator aims to leverage securities companies’ large investor bases while enhancing market efficiency through digitalization. The platform will support tokenized traditional securities and fully digital-native securities, with interoperability across multiple blockchains. Four token projects have already been approved, with two more under review. While crypto remains restricted for payments, Thailand is exploring a Bitcoin payment sandbox in Phuket and considering a stablecoin backed by government bonds, reflecting the country’s shift toward institutionalized digital assets.

TradFi trends

I’ve got 40 priorities, and Bitcoin is one

It was a big week for governments and Bitcoin reserves. Texas is taking significant steps toward integrating Bitcoin into its financial framework. Last week, Governor Dan Patrick announced the state's 40 priorities, highlighting Senate Bill 21, which proposes the establishment of a Texas Bitcoin Reserve. This initiative aims to position Texas at the forefront of the digital economy by creating a strategic Bitcoin reserve, potentially enhancing the state's financial resilience and promoting economic freedom. Meanwhile, in Czechia, the central bank’s governor has proposed allocating up to 5% of its €140 billion reserves into Bitcoin as a diversification strategy. The proposal has been approved for further exploration, potentially making it the first Western central bank to hold cryptocurrency.

Macroeconomic roundup

Crucial macro week ahead

While markets focus on broader developments, this week brings a few key macroeconomic releases worth keeping an eye on:

• JOLTS Job Openings (Tuesday): A higher-than-expected number could support a "higher for longer" rate stance, while a decline may fuel rate cut expectations.
• ADP Nonfarm Employment Change (Wednesday): Given recent strong job creation signals, this report will hint at whether the labor market is holding up or if cracks are forming ahead of Friday’s payroll data.
• ISM Non-Manufacturing PMI (Wednesday): As services continue to drive U.S. economic resilience, a strong print could reinforce inflation concerns, while a miss might shift sentiment toward a softer Fed stance.
• Nonfarm Payrolls & Unemployment Rate (Friday): The most anticipated release of the week, as any major deviation from expectations could either cement or shake market bets on the timing and scale of Fed rate cuts.

The week’s most interesting data story

In profit

As of February 3, 2025, approximately 52 million Bitcoin addresses, representing more than 90% of all addresses, are in profit. This high percentage indicates that a significant majority of Bitcoin holders have acquired their assets at prices lower than the current market value. Historically, such elevated levels of addresses in profit have often preceded market corrections, as investors may choose to realize gains, leading to increased selling pressure. Monitoring this metric can provide insights into market sentiment and potential future price movements.

The numbers

Top 5 stats of the week

$100 million – The $TRUMP meme generated nearly $100 million in trading fees within two weeks of its launch on January 17, 2025.

45,000 BTC – US Spot Bitcoin ETF net inflows in January, only slightly below December’s 45,600.

45 – The number of active applications for crypto-related exchange-traded funds (ETFs) as of January 30.

15% – Bitcoin’s trading range since mid-November, with historical patterns pointing to a breakout within 80 to 90 days.

$11.4 billion – The stablecoin market cap on Solana hit a new record driven by surging memecoin treading.

Hot topics

What the community is discussing

Another priority list.

Newspaper material.

A16z calls for SEC reform in crypto regulation.

Dispatch is a weekly publication by Nexo, designed to help you navigate and take action in the evolving world of digital assets. To share your Dispatch suggestions and comments, email us at [email protected].