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 while bitcoin has shown high returns over time, its unpredictability is a major concern. The Czech National Bank conducted a study after purchasing $1 million in bitcoin in October, which revealed that the cryptocurrency's returns are not closely tied to other assets, making it a potentially valuable addition to a portfolio.
Nonetheless, the bank's board decided against investing its foreign exchange reserves in bitcoin due to the associated risks.