Luxembourg’s sovereign wealth fund has taken a pioneering step by dedicating 1% of its portfolio to Bitcoin exchange-traded funds (ETFs), making it one of the first European state-backed investment bodies to do so.
The announcement was made by Bob Kieffer, Luxembourg’s Director of the Treasury and Secretary General, in a LinkedIn post on Wednesday. He noted that Finance Minister Gilles Roth disclosed this strategic move during his presentation of the 2026 Budget at Luxembourg’s legislative assembly, Chambre des Députés.
“Acknowledging the increasing maturity of this emerging asset class and highlighting Luxembourg’s leadership in digital finance, this investment aligns with FSIL’s newly approved investment policy from July 2025,” stated Kieffer.
The Intergenerational Sovereign Wealth Fund (FSIL) has reportedly allocated 1% of its assets into Bitcoin ETF products. With total assets under management around 764 million euros ($888 million approximately as of June 30), this translates to an investment close to $9 million in Bitcoin ETFs.
Related: Norway’s sovereign wealth fund increases indirect exposure to Bitcoin in 2025
A New Framework Indicates Strategic Progression
This development might surprise those familiar with Luxembourg’s previous official stance on cryptocurrencies. The decision follows reports from late May indicating that crypto companies were classified as high-risk for money laundering within Luxembourg’s risk assessment for 2025, despite growing local adoption efforts.
Kieffer mentioned that while continuing investments in equity and debt markets will persist, there is now authorization for up to a 15% allocation towards alternative investments such as cryptocurrencies, real estate, and private equity. However, direct cryptocurrency holdings are considered too risky:
“To mitigate operational risks effectively, exposure to Bitcoin is achieved through selected ETFs.”
This new framework was unveiled at the end of September following an evaluation conducted mid-June. The announcement described these changes as a “notable evolution,” reflecting both increased maturity within the fund and addressing economic priorities more effectively across social and environmental spheres within Luxembourg.
Related: Sovereign wealth funds investing heavily into BTC amid retail withdrawal — Coinbase executive
Kieffer acknowledged differing perspectives regarding their conservative allocation approach but defended it as balanced progress forward nonetheless:
“[…]a modest allocation strikes an appropriate balance given FSIL’s unique profile while sending clear signals about long-term potential associated with Bitcoins.” he commented.
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