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The Czech National Bank (CNB) governor said Bitcoin could improve portfolio performance, but the asset remains too risky for use in foreign exchange reserves. Speaking at the Bitcoin 2026 conference in Las Vegas, CNB Governor Alex Michl outlined the bank’s findings. The CNB board, however, decided not to add Bitcoin to foreign exchange reserves for now.
Michl said Bitcoin’s volatility is significantly higher than that of other assets and can lead to extreme price swings. He noted that Bitcoin’s price could rise sharply or fall to zero within a single day.
He also emphasized that even diversified portfolios face failure risk across asset classes. Michl said stocks can go to zero and bonds can fail, arguing that central banks should avoid placing reserves in a single asset.
To illustrate the point, Michl recalled buying coffee with Bitcoin years ago, saying the purchase is now worth about $350 due to price appreciation. He described it as “the most expensive coffee” of his life. Despite acknowledging the potential for high long-term returns, he said Bitcoin still appears “too risky” for reserve holdings.
The CNB launched a $1 million pilot portfolio in November. The pilot includes Bitcoin, a USD stablecoin, and a tokenized deposit. The bank approved the project one month earlier.
According to the CNB, the pilot is intended to provide direct experience with blockchain-based assets, which officials said could reshape payment and financial systems. The bank also stated it became the first central bank to purchase Bitcoin.
Michl said an internal CNB study examined Bitcoin’s long-term correlation with traditional assets. The study found that Bitcoin does not move in the same direction as many standard investments. Michl said this low correlation can matter for portfolio design, adding that including an asset like Bitcoin may improve overall portfolio performance.
He compared Bitcoin to venture capital, while describing it as more liquid. A February 2026 study also assessed smaller allocations to Bitcoin and gold, concluding that Bitcoin could generate higher returns with limited exposure.
Despite the study results, the CNB board decided against investing foreign exchange reserves in Bitcoin at this time. The board confirmed the decision in the February 2026 study, meaning the CNB will not include Bitcoin in its official FX reserve portfolio. The bank said it will continue monitoring the pilot portfolio’s results.
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