According to the Czech Republic's central bank governor, Alex Michl, incorporating bitcoin into the bank's reserves could potentially enhance performance due to its low correlation with traditional assets, but its volatility poses a significant risk. Michl emphasized that the asset's value could either surge or plummet to zero. He noted that all assets carry the risk of losing their value, which is why diversification is crucial.
The Czech National Bank's $1 million test portfolio, which includes bitcoin, a USD stablecoin, and a tokenized deposit, was established to gain practical experience with blockchain-based assets. Although the bank's study found that bitcoin can provide high returns with low correlation to other assets, the Bank Board decided against investing its foreign exchange reserves in bitcoin due to its high risk profile.