Luxembourg sovereign wealth fund invests in Bitcoin through ETFs
- First European country with Bitcoin reserves
- 1% allocation via ETFs reduces direct risk
- Expresses belief in the future of cryptocurrencies
Luxembourg announced the conversion of a small fraction of its state resources into Bitcoin ETF shares, as revealed by Finance Minister Gilles Roth. This move makes the country the first in Europe to introduce cryptocurrency exposure through exchange-traded products.
The Luxembourg Intergenerational Sovereign Wealth Fund (FSIL) holds a portfolio of approximately US$900 million, mostly allocated to bonds and stocks. The new strategy envisages investing 1% of this amount (approximately US$9 million) in Bitcoin ETFs. Roth explained that this exposure will be indirect, via regulated ETFs, with the aim of reducing operational risks associated with direct custody.
Bob Kieffer, director of the Luxembourg Treasury, stated: "Some may argue that we are investing too little, too late; others will point to the volatility and speculative nature of the investment. However, given FSIL's specific profile and mission, the fund's board concluded that a 1% allocation strikes the right balance while sending a clear message about Bitcoin's long-term potential."
The decision reflects a change in institutional guidelines approved in July 2025, which authorized up to 15% of the fund's resources to be allocated to "alternative" assets, such as private equity, real estate, and cryptocurrencies. This change explained the proportional reduction in the allocation to stocks and bonds.
Created in 2014 to generate reserves for future generations, the FSIL has historically maintained a conservative profile, investing primarily in investment-grade and index-linked securities. With this new approach, Luxembourg joins a select list of states or sovereign entities experiencing exposure to cryptocurrencies, such as El Salvador and some US state funds.
Although Luxembourg is the first country on the continent to make this deliberate allocation to Bitcoin via ETF, other countries have already expressed interest. The Czech Republic even expressed its intention to adopt BTC as national reserves, but faced objections from the president of the European Central Bank.
With this move, the European institutional debate can closely monitor the evolution of this experiment in the cryptocurrency world, especially with regard to governance, risk, and institutional diversification in cryptocurrencies.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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