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Luxembourg Sovereign Wealth Fund Expands Portfolio to Include Bitcoin ETFs
Luxembourg Sovereign Wealth Fund – In a landmark moment for European digital asset adoption, Luxembourg’s sovereign wealth fund has officially allocated 1% of its portfolio to Bitcoin ETFs, marking one of the first times a state-backed investment entity in Europe has embraced cryptocurrency in such a tangible way.
A Conservative Yet Symbolic Crypto Step
The news was shared by Bob Kieffer, Luxembourg’s Director of the Treasury and Secretary General, in a LinkedIn post following Finance Minister Gilles Roth’s announcement during the country’s 2026 Budget presentation.
The move is part of a broader strategic evolution under the newly approved investment framework for the Intergenerational Sovereign Wealth Fund (FSIL). Approved in July 2025, the updated policy allows up to 15% of FSIL’s assets to be directed into alternative investments — including cryptocurrencies, real estate, and private equity.
About $9 Million in Bitcoin Exposure
With the FSIL managing roughly €764 million (around $888 million) as of June 30, the 1% allocation equates to approximately $9 million invested in Bitcoin ETF products. Notably, the decision avoids direct crypto exposure, opting instead for regulated ETF instruments to mitigate operational risk.
“Recognizing the growing maturity of this new asset class… this investment is an application of FSIL’s new policy,” said Kieffer.
Sending a Long-Term Signal
While some may see the allocation as either overly cautious or too bold, Kieffer emphasized that the fund’s leadership believes 1% strikes the right balance, especially given FSIL’s mission and long-term objectives.
This announcement comes despite Luxembourg’s 2025 risk report categorizing crypto firms as high-risk for money laundering, highlighting the country’s complex stance on digital assets.
Nevertheless, the move solidifies Luxembourg’s leadership in digital finance and may serve as a blueprint for other European sovereign funds considering entry into the crypto space.
