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 volatility poses a significant risk. In a speech at the Bitcoin 2026 conference, Michl noted that bitcoin's price fluctuations are substantially higher than other assets, which could result in substantial losses. Although all assets carry the risk of losing value, Michl emphasized the importance of diversification, stating that investing in a single asset is unwise. He shared a personal anecdote about his first bitcoin transaction, purchasing a coffee that would now be worth approximately $350, highlighting the asset's unpredictable nature.
The Czech National Bank's $1 million test portfolio, which includes bitcoin, a USD stablecoin, and a tokenized deposit, was established to gain hands-on experience with blockchain-based assets and their potential to transform the country's payment and financial systems. A study conducted by the bank found that bitcoin's low long-term correlation with traditional assets makes it an attractive addition to a portfolio, as it can increase returns without significantly raising risk.
However, due to its high volatility, the bank's Board decided against investing its foreign exchange reserves in bitcoin at this time.