Luxembourg's Sovereign Fund (FSIL) Makes History with 1% Bitcoin Allocation

Luxembourg's Intergenerational Sovereign Wealth Fund (FSIL), which manages $730 million (about €7 million of which has been converted to Bitcoin), became the first European sovereign fund to allocate assets directly to Bitcoin in October 2025.

Key Details of the Allocation

• Allocation Size: 1% of the fund's total assets, equaling approximately €7 million.
• Asset Chosen: Bitcoin (BTC) exclusively; no other digital assets were included.
• Method: Spot purchases were executed through regulated exchanges, with holdings kept in cold storage.
• Policy Context: A July 2025 policy revision permitted up to 15% of the fund's assets to be placed in alternatives, including cryptocurrency.

Minister's Statement and Rationale

Finance Minister Gilles Roth officially announced the move at Bitcoin Amsterdam on November 13, 2025.

• Vision: Roth called Bitcoin "digital gold" and stressed its role in a "secure, open and competitive" future of finance.
• Purpose: The allocation is intended to hedge against inflation and currency risks.
• Strategy: The Minister highlighted a long-term holding strategy, referencing Michael Saylor's "There is no second best" philosophy.
• Context: Luxembourg, which already manages €7.6 trillion in funds and hosts licensed fintech firms like Coinbase (licensed June 2025), sees this as aligning with EU innovation goals.

FSIL's Structure and Market Impact

FSIL, established in 2014, previously held 57% in bonds, 40% in equities, and 3% in cash. The 1% Bitcoin allocation is considered a balanced risk move, reflecting officials' view of Bitcoin's growing maturity as an asset class.

While Luxembourg's 2025 risk report still labels crypto firms as high-risk for money laundering, the fund's policy shift signals increasing trust in Bitcoin. The decision follows internal reviews that began in mid-2024.

Analysts view this step as a major signal for other sovereign funds in Europe, following similar moves in the U.S. and Czech Republic. As of November 14, 2025, Bitcoin was trading under $98,000, with no immediate price spike noted from the announcement.

November 2025, Cryptoniteuae