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 makes it an unwise investment. Michl noted that bitcoin's price fluctuations are significantly higher than other assets, making it a risky choice.
Although the central bank's study found that bitcoin can provide high returns with minimal allocations and is more liquid than venture capital, the institution has decided against investing its foreign exchange reserves in bitcoin due to the associated risks. The Czech National Bank's $1 million test portfolio, which includes bitcoin, a USD stablecoin, and a tokenized deposit, was established to explore the potential of blockchain-based assets in the country's future payment and financial systems.