According to the Czech Republic's central bank governor, Alex Michl, incorporating bitcoin into the institution's reserves could enhance performance due to its low correlation with traditional assets. However, he cautioned that its high volatility poses a significant risk. Michl noted that while bitcoin has shown high returns over time, its unpredictability makes it an unwise investment choice for the bank's reserves.
The central bank had purchased $1 million in bitcoin as part of a test portfolio to gain hands-on experience with blockchain-based assets, which could potentially revolutionize the country's payment and financial systems. Although the study found that bitcoin can provide uncorrelated returns, the bank's board decided against investing its foreign exchange reserves in bitcoin due to the associated risks.