Luxembourg sovereign wealth fund invests 1% of assets in Bitcoin spot ETF… first case in the eurozone

Luxembourg's sovereign wealth fund has invested part of its assets in a Bitcoin (BTC) spot exchange-traded fund (ETF), marking the first instance among eurozone (countries that use the euro) states of allocating funds to a cryptoasset (cryptocurrency) ETF.

On the 9th, cryptoasset-focused media CoinDesk reported that the intergenerational sovereign wealth fund under the Luxembourg Finance Ministry (FSIL·Fonds Souverain Intergénérationnel du Luxembourg) recently invested 1% of its assets under management in a Bitcoin spot ETF. This is the first case of a national-level sovereign wealth fund in a member state of the European Union (EU) officially investing in Bitcoin.

Jonathan Westhead, a spokesman for Luxembourg's financial authority, said, "This decision strengthens Luxembourg's leadership in digital finance and signifies recognition of Bitcoin as a mature asset class."

The investment was made under an amended investment policy revised in July this year. The amendment allows FSIL to allocate up to 15% of its total assets under management to alternative investments such as cryptoassets, real estate, and private equity. However, to minimize operational risk, it chose indirect investment via ETFs instead of direct purchases.

Luxembourg established the intergenerational sovereign wealth fund in 2014 and manages about $730 million (about 1 trillion won) in assets, most of which are invested in high-quality bonds.

Westhead said, "The 1% weighting is conservative but sends a clear signal to the market of Bitcoin's long-term potential," adding, "Given FSIL's nature, it was the most balanced choice."

The outlet called the decision "a symbolic event of public funds moving into digital assets in Europe," and said, "The participation of a national-level institution could accelerate the institutionalization of the cryptoasset market."