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 volatility of bitcoin, stating that its value could significantly fluctuate or even drop to zero. This unpredictability led the bank to decide against investing its foreign exchange reserves in bitcoin, despite acknowledging its potential for high returns.
The central bank's study found that bitcoin's long-term correlation with other assets is low, which could make it a valuable addition to a portfolio, but its risks currently outweigh its benefits for reserve holdings.