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, potentially leading to higher returns without significantly increasing risk. However, Michl emphasized the asset's volatility, citing its potential to fluctuate drastically in value.
Speaking 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.' He also shared a personal anecdote about his first bitcoin transaction, buying a coffee that would now be worth approximately $350, underscoring the asset's unpredictable nature.
Despite acknowledging bitcoin's potential for high returns over time, Michl described it as 'too risky' for investment. The Czech National Bank's $1 million test portfolio, which includes bitcoin, a USD stablecoin, and a tokenized deposit, was designed to explore the practical applications of blockchain-based assets.
A study by the CNB found that bitcoin's low long-term correlation with traditional assets could make it a valuable addition to a portfolio, potentially increasing returns without elevating risk. Nonetheless, the bank's board decided against investing its foreign exchange reserves in bitcoin due to its volatility.