According to the Czech Republic's central bank governor, Alex Michl, incorporating bitcoin into the bank's reserves could enhance performance due to its low correlation with traditional assets. However, Michl warned that the asset's high volatility makes it a risky investment. In a speech, Michl noted that bitcoin's price could potentially skyrocket or plummet to zero, emphasizing the importance of diversification. The Czech National Bank's study found that bitcoin can provide higher returns with smaller allocations than gold, but its risks outweigh its benefits for now.
As a result, the bank has decided not to invest its foreign exchange reserves in bitcoin at this time.