Luxembourg allocates 1% of FSIL to Bitcoin ETFs

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Luxembourg has become the first Eurozone nation to invest in Bitcoin through its International Sovereign Wealth Fund (FSIL). The country has allocated 1% of its FSIL $730 million holdings into Bitcoin ETFs. 

Gilles Roth, Luxembourg’s Finance Minister, announced this today during the presentation of the 2026 national budget before the Chambre des Députés. Roth revealed that the investment reflects the country’s long-term strategy to diversify its sovereign funds, per the investment policy passed in July 2025.

Luxembourg allocates 1% of FSIL to Bitcoin ETFs

According to Jonathan Westhead, head of communications for the Luxembourg Finance Agency, the decision to invest 1% of the FSIL fund in Bitcoin reflected the growing maturity of the new digital asset class.

He believes the country has reaffirmed its position as a leader in digital finance across the European continent as a leader in digital finance. Westhead explained that the investment was executed via Bitcoin exchange-traded funds (ETFs) to reduce risks and maintain compliance with the country’s regulatory framework for diverse investments. 

BREAKING: LUXEMBOURG JUST ANNOUNCED THEY INVESTED 1% OF THEIR SOVERIGN WEALTH FUND INTO #BITCOIN

WORLD'S 4th RICHEST COUNTRY BUYING BTC. MASSIVE 🔥 pic.twitter.com/Ka2K6r5GLz

— The Bitcoin Historian (@pete_rizzo_) October 9, 2025

The Intergenerational Sovereign Wealth Fund (FSIL) was established in 2014 to preserve and grow national wealth for future generations. The fund was primarily intended to consist of high-quality bonds, prioritizing conservative investment options. However, the latest policy revision in July allowed the fund to allocate up to 15% of its assets to alternative investment strategies such as private equities, real estate, and crypto. 

Luxembourg revealed that the 1% allocations only mark the initial step towards broader exposure to other emerging digital assets. The country has joined a few countries that have approached similar investment strategies worldwide, such as Georgia, which holds 66 BTC.

Across the EU region, the UK and Finland hold BTC, although through law enforcement seizures and not legitimately financed reserves. Luxembourg has become the first nation across the EU to make a deliberate, policy-based investment effort to hold BTC via ETFs across the region. 

Westhead, head of communication for Luxembourg’s Finance Agency, described the 1% allocation as appropriate to balance innovation with caution due to Bitcoin’s volatile nature. 

“Some might argue that we’re committing too little, too late; others will point out the speculative nature of the investment. Yet, given the FSIL’s particular mission, the management board concluded that this allocation strikes the right balance while sending a clear message about Bitcoin’s role in the future of finance.”

-Jonathan Westhead, Head of Communication in Luxembourg’s Finance Agency

Bitcoin ETFs have provided a more regulated form of digital asset investment, especially for traditional investors in major markets such as the U.S. By early this year, Bitcoin ETFs had already accumulated over $100 billion in net assets. According to SoSoValu data, U.S. BTC spot ETFs currently manage approximately $168 billion in total net assets, representing 6.86% of Bitcoin’s market cap. 

Luxembourg joins sovereign countries holding BTC, such as EL Salvador

Several countries worldwide have initiated state-linked funds venturing into Bitcoin exposure. For instance, according to BitBo data, the United States leads with over 200,000 BTC, followed by China with roughly 190K BTC in terms of countries holding BTC via state reserves. Other countries include Ukraine, Bhutan, the UK, and El Salvador. 

For state-linked funds, the U.S. Wisconsin sovereign fund has accumulated approximately $321 million in BlackRock’s iShares Bitcoin Trust as of February. Elsewhere, Abu Dhabi’s Mubadala Investment company disclosed a $436.9 million stake in the same ETF, while Bhutan’s Druk Holding and Investments confirmed direct Bitcoin holdings exceeding $1 billion earlier this year. 

In July, the Commission de Surveillance du Secteur Financier (CSSF), Luxembourg’s financial regulator, provided clear guidance on including virtual assets in alternative investment funds. The country’s favourable regulatory environment, plus the implementation of the Markets in Crypto-Assets (MiCA) framework across the European Union, has created a stable foundation for institutional engagement in digital assets.

Bitcoin has been down 0.75% over the past 24 hours, trading at $121,395.05 at publication. The token registered its all-time high last week on October 6, recording $126,198.07. 

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