According to the Czech Republic's central bank governor, Alex Michl, incorporating bitcoin into the institution's reserves could potentially enhance performance. However, he cautioned that the asset's volatility far surpasses that of other assets, thereby presenting a considerable risk. Michl noted, 'Its volatility is much higher than other assets. One day its price may be much higher or it could plummet to zero.' He acknowledged that all assets carry the risk of losing their value, which is why diversification is crucial.

'A stock can become worthless, and even a bond can fail. Therefore, it's unwise to invest in just one asset,' he said.

Michl shared his personal experience with bitcoin, recalling that the first time he used it, he bought a coffee, which would now cost around $350, making it the most expensive coffee of his life. Although bitcoin has shown high returns over time, Michl believes it appears too risky.

The Czech National Bank made history by becoming the first central bank to purchase bitcoin, allocating $1 million for a test portfolio consisting of BTC, a USD stablecoin, and a tokenized deposit. The primary goal of this pilot was to gain hands-on experience with blockchain-based assets, which could potentially redefine the country's payment and financial systems in the future.

A study conducted by the CNB revealed that bitcoin has a low long-term correlation with many traditional assets, meaning it does not move in the same direction, which is significant. Michl explained, 'When you add an asset like this, the entire portfolio can perform better. The return can increase, and the risk remains relatively the same.' He added that in the long term, 'bitcoin can provide returns that are not closely linked to other assets. In some ways, it's similar to venture capital but much more liquid.' Despite finding that bitcoin has the potential to drive higher returns with smaller allocations, even more so than gold, the CNB's Bank Board decided not to invest its FX reserves in bitcoin at this time, as stated in a study dated February 2026.