According to the Czech Republic's central bank governor, Alex Michl, incorporating bitcoin into the institution's reserves could potentially enhance performance. However, he cautioned that the asset's volatility far exceeds that of other assets, posing a significant risk. In a speech at the Bitcoin 2026 conference, Michl noted that bitcoin's price can fluctuate dramatically, even potentially dropping to zero. While acknowledging that all assets carry the risk of losing value, Michl emphasized the importance of diversifying portfolios to mitigate this risk.
The Czech National Bank had purchased $1 million in bitcoin as part of a test portfolio, which also included a USD stablecoin and a tokenized deposit, to gain hands-on experience with blockchain-based assets. A study by the CNB found that bitcoin's low correlation with traditional assets could make it a valuable addition to a portfolio, potentially driving higher returns without significantly increasing risk. Nevertheless, the bank ultimately decided against investing its foreign exchange reserves in bitcoin due to its high volatility.