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. However, he emphasized that the cryptocurrency's volatility is substantially higher than other assets, making it a risky investment. Michl noted that all assets carry the risk of losing their value, which is why diversification is crucial. He shared his personal experience with bitcoin, recalling that his first purchase with the cryptocurrency, a coffee, would now be equivalent to $350.
The Czech National Bank had launched a $1 million test portfolio in November, which included bitcoin, a USD stablecoin, and a tokenized deposit, to gain hands-on experience with blockchain-based assets. Although the study found that bitcoin can provide high returns with minimal correlation to traditional assets, the bank's board decided against investing its foreign exchange reserves in the cryptocurrency due to its high risk profile.