The Luxembourg Sovereign Wealth Fund (FSIL) has become the first state fund in the Eurozone to invest in Bitcoin through an exchange-traded fund (ETF). In October 2025, the fund allocated 1% of its assets to the digital asset, marking a significant event for the cryptocurrency market and institutional investors in the region.
This is reported by Business • Media
Investment Policy Update and Fund Strategy
In July 2025, the Luxembourg government approved a new investment policy for FSIL, allowing up to 15% of the portfolio to be directed towards alternative assets, including private equity, real estate, and crypto assets. This approach has paved the way for investments in Bitcoin and other modern financial instruments. Choosing an ETF for cryptocurrency investment helps mitigate operational risks, highlighting the fund’s cautious and measured approach to new investment opportunities.
Motivation and Strategic Vision
Jonathan Westhead, head of communications at the Luxembourg Financial Agency, explained that the decision to invest in Bitcoin through an ETF was a result of the increasing maturity of digital currency as an investment tool. Westhead emphasized that this move aligns with the country’s ambition to maintain leadership in digital finance, and the size of the investment was chosen with the fund’s mission and risks in mind.
“Some may say we are investing too little and too late. Others may argue that Bitcoin is too volatile. However, considering the fund’s mission, the board concluded that 1% is the optimal balance and at the same time a signal of confidence in the long-term potential of the asset,” added Westhead.
The Luxembourg Sovereign Wealth Fund was established in 2014 to build financial reserves for the future. Currently, FSIL’s assets amount to approximately $730 million, the majority of which are held in government bonds.
Amid these changes, discussions continue within the European Union regarding the transfer of control over the cryptocurrency market to the European Securities and Markets Authority (ESMA). At the same time, representatives from smaller countries, including Luxembourg, Malta, and Ireland, express concerns that centralizing oversight could negatively impact the status of their financial centers.