Luxembourg became the first eurozone country to invest in Bitcoin through a sovereign wealth fund, allocating 1% of its $730 million Intergenerational Sovereign Wealth Fund (FSIL) to a Bitcoin exchange-traded fund (ETF), Finance Minister Gilles Low announced during the presentation of the 2026 National Budget on October 9.
This investment marks a milestone for the country’s fiscal strategy, reflecting a gradual transition towards diversified, innovation-driven asset management.
Ross said the move is in line with FSIL’s revised framework approved in July 2025, which now allows up to 15% of portfolios to be allocated to alternative assets, including private equity, real estate, and digital assets such as cryptocurrencies.
First, the euro area
Jonathan Westhead, head of communications at the Luxembourg Monetary Authority, said the 1% allocation shows the country’s confidence in the growing maturity of digital assets and sends a clear message about Bitcoin’s role in the future of finance.
He pointed out that the decision to invest through a Bitcoin ETF was designed to reduce risk while maintaining regulatory compliance under Luxembourg investment law, especially taking into account FSIL’s standards.
FSIL, established in 2014 to preserve the nation’s wealth for future generations, has traditionally been limited to high-quality bonds and conservative assets. The policy amendment in July marked a turning point, expanding the fund’s focus to include high-yield, risk-adjusted investments that reflect global financial innovation.
Luxembourg’s allocation makes it the first EU member state to make an intentional, policy-backed investment in Bitcoin. While other European countries such as Finland and the UK have seized Bitcoin through law enforcement, Luxembourg’s approach is strategic and deliberate.
Only a handful of countries around the world have taken similar measures. El Salvador remains the most prominent example of a sovereign state holding Bitcoin directly as part of its reserves. Other countries such as Bhutan, Georgia, and Norway have also gained exposure to Bitcoin through sovereign wealth funds and institutional funds.
organizational momentum
Luxembourg’s move comes amid a growing wave of institutional adoption of Bitcoin ETFs around the world. The US Bitcoin Spot ETF currently manages approximately $168 billion in net assets, representing nearly 7% of Bitcoin’s market capitalization.
Sovereign actors also followed suit. Earlier this year, the US-based Wisconsin Investment Board disclosed holdings of $321 million in BlackRock’s iShares Bitcoin Trust (IBIT), while Abu Dhabi’s Mubadala Investment Company disclosed holdings of $436.9 million.
Luxembourg’s regulatory environment also plays an important role. In July, the country’s financial regulator, the Financial Supervisory Board (CSSF), issued updated guidelines to allow virtual assets in alternative investment funds, strengthening the basis for FSIL’s new investment mandate.
