Luxembourg’s Intergenerational Sovereign Wealth Fund (FSIL) has made a historic entry into the crypto market, allocating 1% of its $900 million portfolio, roughly $9 million, to Bitcoin exchange-traded funds (ETFs).
The move marks one of the first instances of a European state-backed investment fund gaining exposure to Bitcoin through a regulated vehicle.
The announcement was made during the presentation of Luxembourg’s 2026 national budget, where Finance Minister Gilles Roth outlined the decision.
The allocation was later confirmed by Bob Kieffer, Luxembourg’s Director of the Treasury and Secretary General, who emphasized that the investment reflects the fund’s long-term diversification strategy.
The move follows policy updates introduced in mid-2025, allowing the FSIL to allocate up to 15% of its assets to alternative investments, including crypto, private equity, and real estate.
Under this framework, the fund opted for regulated Bitcoin ETFs rather than direct cryptocurrency holdings, aiming to minimize custody and operational risks while maintaining compliance with Luxembourg’s financial standards.
Although modest in size, the investment is seen as symbolic and forward-looking, signaling Luxembourg’s readiness to embrace digital assets within a structured regulatory environment.
Analysts suggest this could serve as a model for other European sovereign funds exploring exposure to Bitcoin through institutional-grade instruments.
“Given the FSIL’s particular profile and mission, the fund’s management board concluded that a 1% allocation strikes the right balance while sending a clear message about Bitcoin’s long-term potential,” Kieffer said.
The move represents a notable shift from Luxembourg’s earlier caution toward crypto assets. By opting for a regulated ETF route, the FSIL aims to balance innovation with financial prudence, positioning Luxembourg at the forefront of Europe’s evolving approach to sovereign digital asset investments.