Luxembourg’s sovereign wealth fund has decided to allocate 1% of its portfolio, about $9 million, into Bitcoin exchange-traded funds (ETFs). This investment is a notable step taken by a state-backed entity from Europe.

In a LinkedIn post, Bob Kieffer, the Director of the Treasury and Secretary General, noted that this decision came from Finance Minister Gilles Roth during his presentation of the 2026 Budget at the Chambre des Députés, Luxembourg’s legislative body.

“Recognizing the growing maturity of this new asset class, and underlining Luxembourg’s leadership in digital finance, this investment is an application of the FSIL’s new investment policy, which was approved by Government in July 2025,” Kieffer stated.

The investment recognizes Bitcoin ETF products as a growing investment area, and given the fund’s assets amounting to approximately €764 million (about $888 million) as of June 30, the amount allocated to Bitcoin ETFs stands at around $9 million.

Luxembourg’s Intergenerational Sovereign Wealth Fund has not immediately responded to requests for comments regarding this investment.

New Framework Signals Change

The investment marks a change in Luxembourg’s official position on cryptocurrencies, especially following reports that deemed cryptocurrency companies as high-risk for money laundering. Kieffer emphasized that while the sovereign fund will continue to invest in equities and debts, it has now been authorized to allocate up to 15% of its assets into alternative investments like cryptocurrencies, real estate, and private equity. However, direct holding of cryptocurrencies is still regarded as too risky:

“To avoid operational risks, the exposure to Bitcoin has been taken through a selection of ETFs.”

Announced in September, this new framework is seen as a significant evolution of the fund’s investment strategy that reflects its enhancement in addressing Luxembourg’s economic, social, and environmental needs.

Growing Interest in Crypto Across Europe

This news comes on the heels of Norway’s sovereign wealth fund announcing it had upped its indirect Bitcoin exposure by 192% over the past year. Additionally, other European entities seem to be following suit, with the Czech National Bank and proposals in the Swedish parliament indicating a growing acceptance of cryptocurrencies in the region.