Luxembourg Fund Dives Into Bitcoin ETFs: What’s Next for Crypto?

Luxembourg’s Sovereign Wealth Fund Dives into Bitcoin ETFs

Luxembourg’s Intergenerational Sovereign Wealth Fund (FSIL) has made history by investing 1% of its assets in Bitcoin ETFs. This move makes FSIL the first European state-backed fund to embrace crypto-backed products.

Finance Minister Gilles Roth revealed this during a 2026 Budget presentation at the Chambre des Députés. The fund, valued at nearly $888 million, has allocated around $9 million to Bitcoin ETFs. This decision reflects a significant shift in Luxembourg’s stance on cryptocurrencies.

Previously, Luxembourg authorities had flagged crypto firms as high-risk for money laundering. However, the new investment policy, approved in July 2025, allows FSIL to allocate up to 15% of its assets to alternative investments, including crypto.

Bob Kieffer, the director of the Treasury, shared this news on LinkedIn. He acknowledged the investment’s volatility but emphasized its long-term potential. “This allocation strikes the right balance and sends a clear message about Bitcoin’s future,” Kieffer stated.

While some may view this as a cautious step, it signals a growing acceptance of cryptocurrencies. The fund’s move could pave the way for more European nations to explore crypto investments.

Despite earlier warnings about the crypto industry’s risks, Luxembourg’s decision shows a shift in attitudes. It remains to be seen if FSIL will increase its crypto allocation in the future.