The Luxembourg Sovereign Wealth Fund (FSIL) has allocated 1% of its assets to Bitcoin through an exchange-traded fund (ETF), marking the first time a state fund in the Eurozone has invested in cryptocurrencies.
According to Finance Minister Gilles Roth, FSIL made the move as part of its updated investment policy, approved in July 2025, which permits up to 15% of assets to be directed toward alternative investments, including private equity, real estate, and digital assets.
Jonathan Westhead, Head of Communications at Luxembourg’s Financial Agency, explained that the Bitcoin allocation was made via selected ETFs to minimize operational risks. He emphasized that the decision reflects both the growing maturity of Bitcoin as an asset and the country’s aim to maintain a leadership position in digital finance.
“Some may say the allocation is small or late, while others consider Bitcoin too volatile. However, given the fund’s mission, the board concluded that 1% is the optimal balance and also a signal of confidence in Bitcoin’s long-term potential,” Westhead added.
The FSIL, established in 2014 to build long-term reserves, currently manages approximately $730 million, primarily invested in government bonds.
Earlier reports indicated that the European Union plans to centralize crypto market oversight under ESMA, but smaller nations like Luxembourg, Malta, and Ireland worry that this could weaken their financial hubs.
This strategic move by Luxembourg positions the country as a pioneer among European sovereign funds entering the cryptocurrency market.
