Luxembourg Wealth Fund Invests 1% in Bitcoin ETFs
The Intergenerational Sovereign Wealth Fund of Luxembourg has committed 1% of its total assets to Bitcoin ETFs, establishing FSIL as the first state-backed fund in Europe to make such an investment.
Summary
- The FSIL has allocated 1% of its entire wealth, approximately $9 million, towards Bitcoin ETFs.
- This move marks a significant shift, especially in light of past classifications by Luxembourg authorities that deemed crypto firms “high-risk” concerning money laundering.
During a presentation on the 2026 Budget at the Chambre des Députés, Finance Minister Gilles Roth announced the 1% allocation of FSIL’s assets to Bitcoin ETFs.
This is a landmark decision, as it represents the first time a European state-supported investment body has ventured into crypto-related assets. Other European countries, like Finland and the U.K., have Bitcoin (BTC), but these assets primarily stem from confiscated criminal funds.
The announcement was shared by Bob Kieffer, Director of the Treasury and Secretary General, on LinkedIn. He noted that this investment aligns with FSIL’s newly approved investment strategy from July 2025.
Under the revised framework, the FSIL is authorized to invest up to 15% of its portfolio in alternative assets, which include cryptocurrencies. Other permitted alternative investments include private equity and real estate.
“Some may argue that our investment is minimal or delayed; others may emphasize the volatility and speculation associated with it,” Kieffer acknowledged in his post.
“Nevertheless, given FSIL’s specific profile and objectives, the board determined that a 1% allocation is a prudent strategy, conveying a strong message about Bitcoin’s long-term potential,” he added.
As of June 30, the fund manages assets totaling around 764 million euros, or nearly $888 million. This means an investment of approximately $9 million in Bitcoin ETFs based on the 1% allocation specified.
Is Luxembourg’s attitude toward crypto changing?
This decision to engage one of its state-funded investment entities in cryptocurrency marks a significant departure from the previous caution displayed in Luxembourg’s National Risk Assessment. In May 2025, authorities classified crypto exchanges as high-risk due to money laundering concerns.
The report pointed out that the crypto industry still presents considerable risks due to various factors, such as transaction volumes, customer acquisition, and distribution methods. Furthermore, the report criticized the “nature of the business” of virtual asset service providers, noting that not all crypto firms have transparent ownership or legal frameworks.
Despite these earlier warnings, attitudes seem to have shifted following the implementation of the fund’s new framework. It remains uncertain whether the wealth fund will increase its allocation within the 15% cap for other crypto investment opportunities.