According to the Czech Republic's central bank governor, Alex Michl, incorporating bitcoin into the bank's reserves could potentially enhance performance due to its low correlation with traditional assets. However, Michl emphasized the high volatility of bitcoin, stating that its value could significantly fluctuate or even drop to zero. This unpredictability led the bank's board to decide against investing its foreign exchange reserves in bitcoin at present.
The central bank had initially purchased bitcoin as part of a $1 million test portfolio to gain hands-on experience with blockchain-based assets and their potential impact on the country's future payment and financial systems. While the study found bitcoin to offer high returns and liquidity, its risks outweighed these benefits for reserve investment purposes.