According to the Czech Republic's central bank governor, Alex Michl, incorporating bitcoin into the institution's reserves could potentially boost performance. However, he cautioned that the asset's volatility surpasses that of other investments, posing a significant risk. In a speech delivered at the Bitcoin 2026 conference in Las Vegas, Michl noted, 'Its volatility is much higher than other assets.
One day its price may skyrocket or plummet to zero.' He acknowledged that all assets carry the risk of losing their value, emphasizing the importance of diversified portfolios. Michl shared a personal anecdote, recounting how his first bitcoin purchase was used to buy a coffee, which would now be equivalent to $350, making it the most expensive coffee he had ever bought.
Although bitcoin has demonstrated high returns over time, Michl believes it is too risky. The Czech National Bank made history by becoming the first central bank to purchase bitcoin in November, allocating $1 million to a test portfolio comprising BTC, a USD stablecoin, and a tokenized deposit. The pilot aimed to gain practical experience with blockchain-based assets, which could potentially revolutionize the country's payment and financial systems.
A study conducted by the CNB found that bitcoin's low long-term correlation with traditional assets makes it an attractive addition to portfolios, as it can enhance returns while maintaining a similar risk profile. Michl explained that bitcoin can provide returns that are not closely tied to other assets, likening it to venture capital but with greater liquidity.
Despite its potential to drive higher returns, even with smaller allocations, the CNB's Bank Board has decided not to invest its foreign exchange reserves in bitcoin at this time, as stated in a study dated February 2026.