Luxembourg’s Bold Bet: Sovereign Wealth Fund All-In on Bitcoin – ’No Second Best’ Says Finance Minister

Luxembourg just threw conventional portfolio theory out the window. The micro-nation's sovereign wealth fund has gone all-in on Bitcoin—shunning gold, bonds, and even other cryptocurrencies.

Why? According to the Finance Minister: 'There's no second best.' The statement reads like a middle finger to traditional asset managers still obsessing over 60/40 portfolios.

This isn't diversification—it's conviction. While other funds dabble with 1-2% crypto allocations, Luxembourg's move suggests they see Bitcoin as the only inflation hedge that matters. Take that, Swiss franc.

The timing raises eyebrows. With BTC hovering below its 2021 ATH, some might call this late to the party. But for a country that built its wealth on banking secrecy? This pivot to transparent ledgers smells like strategic reinvention—or desperate FOMO.

One thing's certain: when a sovereign wealth fund bypasses every other asset class, Wall Street's 'prudent investor' rulebook needs rewriting. Maybe diversify into 16th-century portfolio theory next?

Minister Roth explicitly noted that though the fund’s investment policy allows for an allocation in any crypto asset, “it has chosen to invest only in Bitcoin.”

“Because, as Michel Saylor once said, there is no second best… and we’re in it for the long haul,” he noted, followed by an instant applause across the room.

“Let Me Be Clear: Luxembourg HODLs” – Finance Minister

The minister closed his speech with a clear policy stance, emphasizing that the nation plans to hold the crypto.

“Let me be clear: Luxembourg HODLs. We are still very early. I am sure we will still soon follow our lead.”

Luxembourg, being one of the world’s largest cross-border investment hub, manages over €7.6 trillion in funds. “In recent years, a whole range of cross-border fintech companies have set up in Luxembourg,” he continued.

These companies serve as payment gateways, tokenization platforms and regulatory platforms for clients across the globe, Roth added.

In June, crypto exchange Coinbase won a European Union Markets in Crypto Assets license (MiCA) from Luxembourg to offer crypto services across the European Union. However, the exchange’s intended operations in Luxembourg would be relatively less, as reported earlier.

From Flagging Crypto Businesses “High Risk” to Welcoming Digital Assets

Surprisingly, Luxembourg labelled crypto firms as “high-risk” entities for money laundering in its 2025 risk report. The study highlighted how VIRTUAL Asset Service Providers (VASPs) often operate in decentralized environments, complicating oversight.

“Over the past decade, we have built a trusty tone for Bitcoin and digital assets,” Gilles Roth said. In fact, the nation regulated the very first European crypto exchange, Bitstamp, nearly a decade ago.

Luxembourg supports the industry “to make crypto a trusted asset class. We are convinced that the future of finance is digital,” he added, referring to Bitcoin as “digital gold.”