Luxembourg’s sovereign wealth fund has allocated 1% of its portfolio to Bitcoin exchange-traded funds (ETFs), one of the first such moves by a European government-backed investment entity.
Luxembourg Finance Secretary and Secretary General Bob Kiefer mentioned the investment in a LinkedIn post on Wednesday. He said Finance Minister Gilles Roux revealed the decision during the presentation of the 2026 budget in the Luxembourg parliament.
“In recognition of the growing maturity of this new asset class and underscoring Luxembourg’s leadership in digital finance, this investment is an application of FSIL’s new investment policy approved by the government in July 2025,” Kiefer said.
Luxembourg’s Intergenerational Sovereign Wealth Fund (FSIL) has reportedly invested 1% of its assets in Bitcoin ETF products. Considering that the fund had approximately 764 million euros (approximately $888 million) in assets under management as of June 30, this equates to an approximately $9 million investment in the Bitcoin ETF.
Luxembourg’s Intergenerational Sovereign Wealth Fund did not immediately respond to Cointelegraph’s request for comment.
Related: Norwegian sovereign wealth fund expands indirect Bitcoin exposure in 2025
New framework signals strategic evolution
This news may come as a surprise to those who have been following the country’s official stance on cryptocurrencies. The announcement followed reports in late May that Luxembourg’s 2025 Risk Report classified crypto companies as having a high risk of money laundering, even as domestic institutions ramped up efforts to embrace cryptocurrencies.
Kiefer said Luxembourg’s state assets will continue to invest in the stock and debt markets, but are now also “authorized to allocate up to 15% of their assets to alternative investments,” including cryptocurrencies, real estate and private equity. Still, holding cryptocurrencies directly was considered too risky.
“Bitcoin exposure is taken through selected ETFs to avoid operational risks.”
The new framework will be announced in late September and will follow a review of investment policy in mid-June. The announcement described the changes as a “significant evolution” and said, “This new iteration reflects the increasing maturity of the Fund and the need to better address the country’s economic, social and environmental priorities.”
Related: Sovereign wealth funds flow into BTC as retail exits — Coinbase executives
Kiefer acknowledged that conservative allocations may be seen as too conservative by some and too speculative by others. He defended the decision as a balanced step forward.
“Given FSIL’s special profile and mission, the fund’s management committee concluded that a 1% allocation strikes the right balance while sending a clear message about Bitcoin’s long-term potential,” he said.
Cryptocurrency fever hits Europe
The news follows Norway’s Sovereign Wealth Fund, the world’s largest state-owned wealth fund, increasing its indirect exposure to Bitcoin by 192% over the past year. Elsewhere in Europe, the Czech National Bank increased its holdings in US cryptocurrency exchange Coinbase in mid-July, and in early April a Swedish parliamentarian proposed a “budget-neutral” Bitcoin reserve to the finance minister.
In February, the President of the Czech National Bank said that Bitcoin should be studied, not feared, as the Czech National Bank began considering a Bitcoin test portfolio.
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