According to the Czech Republic's central bank governor, Alex Michl, incorporating bitcoin into the institution's reserves could potentially enhance performance, but its high volatility poses a significant risk. In a speech at the Bitcoin 2026 conference, Michl noted that bitcoin's price fluctuations are more pronounced than those of other assets, which could result in substantial losses. While acknowledging that all investments carry some level of risk, Michl emphasized the importance of diversification to mitigate potential losses. The Czech National Bank had previously purchased $1 million in bitcoin as part of a test portfolio to gain hands-on experience with blockchain-based assets.
Although the study found that bitcoin has low long-term correlation with traditional assets, which could make it a valuable addition to a portfolio, the bank ultimately decided not to invest its foreign exchange reserves in bitcoin due to its high risk profile.