Luxembourg Sovereign Wealth Fund Allocates 1% to Bitcoin ETFs

10th October 2025 – Luxembourg sovereign wealth fund, FSIL, will allocate 1% of its €764 million portfolio to Bitcoin ETFs in a bold step by the European country, as announced by Finance Minister Gilles Roth during his 2026 budget speech.

This marks a historic first for the country. Never before has a Luxembourg public fund invested in crypto.

Luxembourg Doubles Down on Bitcoin and Digital Finance

The allocation isn’t random. It follows a July 2025 policy update that authorized FSIL to invest up to 15% of its assets in alternatives, including cryptocurrencies, real estate, and private equity.

Bob Kieffer, FSIL’s Director of Treasury, shared more details. He explained that the Bitcoin exposure comes via ETFs, not direct purchases. “To avoid operational risks, the exposure to Bitcoin has been taken through a selection of ETFs,” Kieffer said on LinkedIn.

By choosing ETFs, FSIL avoids complexities like custody, wallets, and private key management – still controversial in traditional finance circles.

Boosting Luxembourg’s Status as a Crypto Hub

The move also aligns with Luxembourg’s broader goal, becoming a European hub for digital finance. Several companies are already using the country as a base to seek MiCA licenses, which authorize crypto operations across the EU.

CSV MP Laurent Mosar celebrated the news. “This is really great news for crypto-assets,” he posted on social media. “It’s the first time a public fund in Luxembourg has taken this step.”

A Measured Yet Strategic Bet

FSIL isn’t rushing in. It already invests 53% in investment-grade bonds and 46% in index funds. Just under 1% sits in cash for foreign exchange hedging. Now, crypto gets a small but symbolic slice.

Kieffer acknowledged differing opinions. “Some might say we’re too late. Others might call it too risky,” he noted. “But this 1% allocation strikes a balance – it sends a clear message about Bitcoin’s long-term potential.”

If market conditions stay stable, the crypto portion could exceed €8.2 million in 2026.

Sovereign Bitcoin Exposure Goes Global

Luxembourg joins a growing list of European nations exploring or expanding crypto holdings:

• Norway’s $1.9 trillion fund holds 11,400 BTC
• The UK government controls around 61,200 BTC
• Finland reportedly holds 100 BTC
• The Czech Republic is considering shifting €7 billion of reserves into Bitcoin

Meanwhile, Czech and Swedish officials have floated Bitcoin as a future reserve component.

Kieffer said the new policy reflects FSIL’s evolving strategy. It allows the fund to “better support the country’s economic, social, and environmental priorities” through diversified investment.

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BREAKING: LUXEMBOURG JUST ANNOUNCED THEY INVESTED 1% OF THEIR SOVERIGN WEALTH FUND INTO #BITCOIN WORLD'S 4th RICHEST COUNTRY BUYING BTC. MASSIVE 🔥 https://t.co/Ka2K6r5GLz

The Bitcoin Historian

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