Luxembourg wealth fund to allocate 1% to Bitcoin ETFs

The €7 million investment marks Luxembourg’s first sovereign exposure to Bitcoin

by Blockworks /

October 9, 2025 02:30 pm

Suriady Wutan/Shutterstock and Adobe modified by BLockworks

Luxembourg’s Intergenerational Sovereign Wealth Fund (FSIL) will allocate 1% of its portfolio — about €7 million — to bitcoin and other crypto assets, Finance Minister Gilles Roth announced on Thursday, during the 2026 budget presentation.

The move makes Luxembourg the first Eurozone country to introduce sovereign exposure to bitcoin exchange-traded funds (ETFs), a significant symbolic development for Europe’s financial landscape.

According to Roth, the FSIL will gain exposure indirectly through regulated ETFs rather than direct holdings, minimizing custody and operational risks. Treasury Director Bob Kieffer confirmed that the allocation follows a July 2025 policy revision allowing up to 15% of FSIL assets to be placed in “alternative investments,” including crypto.

As of mid-2025, FSIL held roughly $887 million, mostly in bonds and index funds. Kieffer described the 1% allocation as a balanced experiment reflecting Bitcoin’s “long-term potential.”

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The decision aligns with Luxembourg’s ongoing efforts to establish itself as a fintech and crypto hub under the EU’s Markets in Crypto-Assets (MiCA) regime. The country hosts numerous firms seeking MiCA licenses, reflecting its ambition to shape Europe’s digital finance infrastructure.

Luxembourg joins a growing list of governments cautiously exploring bitcoin exposure.

Norway’s $1.9 trillion sovereign fund indirectly holds bitcoin through corporate equities, while the Czech Republic and Finland have signaled similar interest.

This is a developing story.

This article was generated with the assistance of AI and reviewed by editor Jeffrey Albus before publication.

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