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Luxembourg sovereign wealth fund, FSIL, will allocate 1% of its €764 million portfolio to Bitcoin ETFs in a bold step by the European country
Author: Sahil Thakur
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.
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.
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.”
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.
Luxembourg joins a growing list of European nations exploring or expanding crypto holdings:
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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