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 its volatility surpasses that of other assets, posing a significant risk. In a speech at the Bitcoin 2026 conference, Michl noted that bitcoin's price could 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 cost approximately $350. While acknowledging bitcoin's high returns over time, he deemed it too risky for investment. The Czech National Bank created a $1 million test portfolio including bitcoin, a USD stablecoin, and a tokenized deposit to gain hands-on experience with blockchain-based assets. A study found that bitcoin's low correlation with traditional assets could lead to improved portfolio performance, with potential returns that are not closely tied to other assets.
Nevertheless, the bank's Board decided against investing its foreign exchange reserves in bitcoin due to its excessive risk.