Luxembourg Wealth Fund Allocates 1% to Bitcoin ETFs
The Intergenerational Sovereign Wealth Fund of Luxembourg has allocated 1% of its assets to Bitcoin ETFs, making FSIL the inaugural state-backed fund in Europe to undertake such an investment.
Summary
- The Luxembourg Intergenerational Sovereign Wealth Fund, known as FSIL, has invested 1% of its overall wealth—approximately $9 million—into Bitcoin ETFs.
- This investment signifies a noteworthy change, especially since Luxembourg authorities had previously categorized crypto companies as “high-risk” in terms of money laundering.
In a presentation concerning the 2026 Budget at the Chambre des Députés, Finance Minister Gilles Roth revealed that the FSIL has dedicated 1% of its holdings to Bitcoin ETFs.
This represents a historic move, as it is the first instance of a European state-supported investment entity investing a portion of its fund in crypto-related products. While other European nations, such as Finland and the U.K., reportedly hold Bitcoin (BTC), these assets have largely been seized from criminal activities.
The announcement was made public by Bob Kieffer, the country’s Director of the Treasury and Secretary General, on LinkedIn. He mentioned that this investment aligns with the FSIL’s new investment strategy, which received official approval from the government in July 2025.
As part of the updated framework, the FSIL is permitted to allocate up to 15% of its asset portfolio towards alternative investments, including cryptocurrencies. Other alternative assets allowed under the new legislation include private equity and real estate.
“Some may contend that our commitment is insufficient or belated; others will highlight the volatility and speculative aspect of this investment,” Kieffer conceded in his post.
“However, considering the specific profile and objectives of the FSIL, the board concluded that a 1% allocation is a balanced approach, sending a strong message regarding Bitcoin’s potential for the long term,” he added.
As of June 30, the fund manages assets worth approximately 764 million euros, or nearly $888 million. This translates to an investment of around $9 million in Bitcoin ETFs based on the aforementioned 1% allocation.
Is Luxembourg’s stance on crypto evolving?
This decision to involve one of its state-funded investment vehicles in cryptocurrency reflects a major shift from the previous caution demonstrated in Luxembourg’s latest National Risk Assessment. In May 2025, authorities categorized crypto exchanges as entities with high risks related to money laundering.
The report highlighted that the crypto sector continues to pose significant risks due to various factors, including transaction volumes, client outreach, and distribution methods. Moreover, the “nature of the business” concerning virtual asset service providers was criticized, as not all crypto firms exhibit clear ownership or legal structures.
Despite these earlier cautions, it seems that perspectives have changed following the adoption of the fund’s new framework. It remains to be seen whether the wealth fund will increase its percentage allocation of the 15% allowed for other crypto-based investment possibilities.