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 its volatility poses a significant risk.
In a speech at the Bitcoin 2026 conference, Michl noted, 'Its volatility is much higher than other assets. One day its price may surge or plummet to zero.' He acknowledged that all assets carry the risk of losing value, which is why diversification is key.
'A stock can become worthless, and even a bond can fail, which is why it's unwise to rely on a single asset,' Michl said. Reflecting on his personal experience with bitcoin, he mentioned buying a coffee with it, which would now cost around $350, making it the most expensive coffee he's ever had. Although bitcoin has shown high returns over time, Michl believes it's too risky.
The Czech National Bank created a $1 million test portfolio including bitcoin, a USD stablecoin, and a tokenized deposit to gain hands-on experience with blockchain-based assets. A study by the CNB found that bitcoin's low long-term correlation with traditional assets could make it a valuable addition to a portfolio, potentially increasing returns without significantly raising risk. However, the bank's board decided against investing its foreign exchange reserves in bitcoin due to its volatility.