Luxembourg’s sovereign wealth fund FSIL has allocated 1% of its assets to a Bitcoin ETF, worth around $9 million, in one of the first examples of a sovereign crypto investment in Europe.
Luxembourg Invests 1% of its sovereign wealth fund in a Bitcoin ETF
The Luxembourg Sovereign Wealth Fund (FSIL) has allocated 1% of its portfolio to a Bitcoin ETF, becoming one of the first sovereign wealth funds in Europe to officially integrate crypto assets into its strategy.
The decision was made as part of the 2026 budget presented by Finance Minister Gilles Roth in parliament, according to Treasury Director and Secretary General Bob Kieffer.
“Recognizing the growing maturity of this new asset class and underlining Luxembourg’s leadership in digital finance, this decision is part of FSIL’s new investment policy,” Kieffer said.
ETF investments reduce risk
According to the Ministry of Finance, 1% of FSIL’s assets, which amounted to 764 million euros ($888 million) as of June 30, are equivalent to about $9 million invested in several Bitcoin ETFs. Direct purchases of BTC are still considered too risky, so exposure is carried out exclusively through exchange-traded funds (ETFs).
The fund’s updated policy allows it to invest up to 15% of its assets in “alternative investments” — cryptocurrencies, real estate and private equity.
“To avoid operational risks, the fund chose ETFs rather than direct cryptocurrency holdings,” Kieffer explained.
A cautious but symbolic move
Despite the relatively small stake, the decision is seen as a strategic signal. Kieffer acknowledged that for some, the investment seems too cautious, for others — risky, but it “sends a clear message about the long-term potential of Bitcoin.”
The changes were made possible after the investment policy was reviewed in June and the government approved the new approach in July 2025.
European crypto trend among state investors
Luxembourg has joined the growing European trend of state crypto investments:
- The Norwegian sovereign wealth fund increased its indirect Bitcoin exposure by 192% year-on-year.
- The Czech National Bank increased its stake in Coinbase in July.
- In Sweden, a lawmaker proposed creating a “fiscally neutral” Bitcoin reserve in the spring.
Analysts call Luxembourg’s decision “landmark” for the EU — it demonstrates a shift from regulatory caution to institutional recognition of Bitcoin as an asset class.
Related: BlackRock’s Bitcoin ETF Becomes World’s Most Profitable ETF, Collecting $245 Million in Fees
