According to the Czech Republic's central bank governor, Alex Michl, incorporating bitcoin into the institution's reserves could enhance performance but its unpredictable nature makes it a risky choice. In a speech at the Bitcoin 2026 conference, Michl noted that bitcoin's price fluctuations are more extreme than other assets, stating that its value could potentially skyrocket or plummet to zero. He emphasized the importance of diversification, pointing out that even traditionally stable assets like stocks and bonds carry the risk of losing their value. Michl shared his personal experience with bitcoin, recalling that a coffee he bought using the cryptocurrency would now cost around $350, making it the most expensive coffee of his life.
While acknowledging bitcoin's potential for high returns over time, Michl deemed it too risky for investment. The Czech National Bank's $1 million test portfolio, which includes bitcoin, a USD stablecoin, and a tokenized deposit, was established to gain hands-on experience with blockchain-based assets. A study by the CNB found that bitcoin's low correlation with traditional assets could make it a valuable addition to a portfolio, potentially increasing returns while maintaining a similar level of risk. However, the bank ultimately decided not to invest its foreign exchange reserves in bitcoin due to its volatility.