Luxembourg’s sovereign wealth fund has allocated 1% of its portfolio to Bitcoin exchange-traded funds (ETFs), marking one of the first such moves by a European state-backed investment entity.
Luxembourg Director of the Treasury and Secretary General Bob Kieffer noted the investment in a Wednesday LinkedIn post. He said Finance Minister Gilles Roth had revealed the decision during his presentation of the 2026 Budget at the Chambre des Députés, Luxembourg’s legislature.
“Recognizing the growing maturity of this new asset class, and underlining Luxembourg’s leadership in digital finance, this investment is an application of the FSIL’s new investment policy, which was approved by Government in July 2025,“ Kieffer said.
Luxembourg’s Intergenerational Sovereign Wealth Fund (FSIL) has reportedly invested 1% of its holdings into Bitcoin ETF products. Considering the fund’s assets under management of about 764 million euros (almost $888 million) as of June 30, this is equivalent to a placement of about $9 million into Bitcoin ETFs.
Luxembourg’s Intergenerational Sovereign Wealth Fund did not immediately respond to Cointelegraph’s request for comment.
Related: Norway’s sovereign wealth fund ups indirect Bitcoin exposure in 2025
New framework signals strategic evolution
The news may come as a surprise to those who have been following the country’s official stance on cryptocurrencies. The announcement followed late May reports that Luxembourg’s 2025 risk report classified crypto companies as high-risk for money laundering, even as local institutions ramped up their crypto adoption efforts.
Kieffer noted that Luxembourg’s sovereign wealth will continue to invest in equity and debt markets, but is now also “authorized to allocate up to 15% of its assets to alternative investments,” including cryptocurrencies, real estate and private equity. Still, direct cryptocurrency holding was deemed too risky:
“To avoid operational risks, the exposure to Bitcoin has been taken through a selection of ETFs.”
The new framework was announced in late September and follows a review of the investment policy in mid-June. The announcement described the change as a “significant evolution” and said that “this new iteration reflects the fund’s increased maturity and the need to better address the country’s economic, social, and environmental priorities.”
Related: Sovereign wealth funds piling into BTC as retail exits — Coinbase exec
Kieffer acknowledged that the modest allocation might be seen as too conservative by some and too speculative by others. He defended the decision as a balanced step forward.
“Given the FSIL’s particular profile and mission, the fund’s management board concluded that a 1% allocation strikes the right balance while sending a clear message about Bitcoin’s long-term potential,” he said.
Crypto fever hits Europe
The news follows Norway’s sovereign wealth fund, the largest state-directed wealth fund in the world, which increased its indirect Bitcoin exposure by 192% over the past year. Elsewhere in Europe, the Czech National Bank boosted its holdings of US crypto exchange Coinbase in mid-July, and a member of the Swedish parliament proposed a “budget-neutral” Bitcoin reserve to the finance minister in early April.
In February, the Czech National Bank governor said that Bitcoin should be studied, not feared, as the institution started considering a Bitcoin test portfolio.
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