According to the Czech Republic's central bank governor, Alex Michl, incorporating bitcoin into the bank's reserves could enhance performance due to its low correlation with traditional assets, but its high volatility is a major concern. Michl noted that bitcoin's price fluctuations are more pronounced than other assets, making it a risky investment. Despite acknowledging that all assets carry the risk of losing value, Michl emphasized the importance of diversification, stating that betting on a single asset is unwise. The central bank's $1 million test portfolio, which includes bitcoin, a USD stablecoin, and a tokenized deposit, was established to gain hands-on experience with blockchain-based assets.
Although the study found that bitcoin can provide high returns with minimal correlation to other assets, the bank's board decided against investing its foreign exchange reserves in bitcoin due to the associated risks.