Luxembourg has become the first eurozone country to invest in Bitcoin through its sovereign wealth fund, allocating 1% of its $730 million Intergenerational Sovereign Wealth Fund (FSIL) to Bitcoin Exchange-Traded Funds (ETFs), Finance Minister Gilles Roth announced on October 9 during the presentation of the national budget for 2026.
The investment marks a milestone for the country’s financial strategy and reflects a gradual shift towards diversified, innovation-driven asset management.
Roth said the move is in line with the FSIL’s revised framework approved in July 2025, which now allows up to 15% of its portfolio to be allocated to alternative assets, including private equity, real estate and digital assets such as cryptocurrencies.
First a eurozone
Jonathan Westhead, head of communications at the Luxembourg Finance Agency, said the 1% allocation demonstrates 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 noted that the decision to invest through Bitcoin ETFs was intended to limit risk while maintaining regulatory compliance under Luxembourg investment law, especially given the standards of the FSIL.
Established in 2014 to preserve national prosperity for future generations, FSIL was traditionally limited to high-quality bonds and conservative assets. July’s policy change marked a turning point, expanding the fund’s scope to include risk-adjusted, higher-return investments that reflect global financial innovation.
Luxembourg’s allocation makes it the first EU country to make a deliberate, policy-backed investment in Bitcoin. While other European countries, such as Finland and Great Britain, seize Bitcoin through law enforcement, Luxembourg’s approach is strategic and planned.
Only a handful of countries worldwide have taken similar steps. El Salvador remains the most prominent example of a sovereign nation holding Bitcoin directly as part of its reserves. Other countries, including Bhutan, Georgia and Norway, have also gained exposure to Bitcoin through sovereign or institutional funds.
Institutional momentum
The move in Luxembourg comes amid a broader wave of institutional adoption of Bitcoin ETFs worldwide. US spot Bitcoin ETFs currently manage approximately $168 billion in net assets, representing almost 7% of Bitcoin’s total market capitalization.
Sovereign entities have followed suit. The Wisconsin Investment Board in the US disclosed $321 million in holdings of BlackRock’s iShares Bitcoin Trust (IBIT) earlier this year, while Abu Dhabi’s Mubadala Investment Company revealed a position of $436.9 million.
Luxembourg’s regulatory environment has also played a crucial role. In July, the country’s financial regulator, the Commission de Surveillance du Secteur Financier (CSSF), issued updated guidelines allowing virtual assets in alternative investment funds, strengthening the basis for the FSIL’s new investment mandate.