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 surpasses that of other investments, posing a significant risk. In a speech at the Bitcoin 2026 conference, Michl noted, 'Its volatility is much higher than other assets. One day its price may be much higher or it could go to zero.
Yes, zero.' Michl acknowledged that all assets carry the risk of losing their value, which is why diversified portfolios are essential. 'A stock can go to zero. Even a bond can fail.
So for me, that is why it is not wise to bet just on one asset.' He shared a personal anecdote about his first experience with bitcoin, purchasing a coffee that would now be worth approximately $350, making it the most expensive coffee of his life. Although bitcoin has shown high returns over time, Michl believes it appears too risky for investment.
The Czech National Bank created a $1 million test portfolio in November, including bitcoin, a USD stablecoin, and a tokenized deposit, to gain hands-on experience with blockchain-based assets. A study by the CNB found that bitcoin has low long-term correlation with traditional assets, which could make it a valuable addition to a portfolio. 'When you add an asset like this, the whole portfolio can work better. Return can go up and risk stays about the same,' Michl explained.
Despite the potential for higher returns, the CNB's Bank Board decided not to invest its FX reserves in bitcoin at this time, citing the asset's risk level.