According to the Czech Republic's central bank governor, Alex Michl, incorporating bitcoin into the bank's reserves could potentially enhance performance. However, he cautioned that the asset's volatility far surpasses that of other assets, posing a significant risk. In a speech at the Bitcoin 2026 conference, Michl noted that bitcoin's price fluctuations are extreme, with the potential to either skyrocket or plummet to zero. He emphasized that all assets carry the risk of losing their value, which is why diversification is crucial.
Michl shared his personal experience with bitcoin, recalling that his first purchase was a coffee that would now be worth around $350, making it the most expensive coffee he has ever bought. Although bitcoin has demonstrated high returns over time, Michl believes it is too risky for investment. The Czech National Bank had created a $1 million test portfolio in November, which included 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's low correlation with traditional assets makes it an attractive addition to a portfolio, as it can increase returns without significantly raising risk.
However, the bank ultimately decided not to invest its foreign exchange reserves in bitcoin due to its high volatility.