TLDR
- The Czech National Bank governor said Bitcoin remains too risky for foreign exchange reserves despite potential portfolio benefits.
- Alex Michl stated that Bitcoin’s volatility is much higher than traditional reserve assets.
- The CNB launched a $1 million pilot portfolio that includes Bitcoin, a USD stablecoin, and a tokenized deposit.
- An internal study found that Bitcoin has low long-term correlation with many traditional assets.
- The CNB board decided in February 2026 not to add Bitcoin to its official FX reserves.
The Czech National Bank governor said Bitcoin could improve portfolio performance but remains too risky for reserves. He spoke at the Bitcoin 2026 conference in Las Vegas and outlined the bank’s findings. However, the CNB board decided against adding Bitcoin to foreign exchange reserves for now.
Bitcoin Volatility Limits Reserve Allocation
Czech National Bank Governor Alex Michl addressed Bitcoin’s role in reserve management during his conference speech. He said the asset shows high volatility and carries the risk of extreme price swings.
“Its volatility is much higher than other assets,” Michl said.
He added that Bitcoin’s price could rise sharply or fall to zero in one day. “One day its price may be much higher or it could go to zero. Yes, zero,” he said. He stressed that banks manage diversified portfolios because all assets carry failure risk.
Michl explained that stocks and bonds can also lose full value. “A stock can go to zero. Even a bond can fail,” he said. Therefore, he said central banks should avoid placing reserves in one asset.
He shared a personal example about buying coffee with Bitcoin years ago. That purchase now equals about $350 due to price appreciation. “It was the most expensive coffee of my life,” he said.
However, he maintained that long-term returns do not remove the asset’s risk. He said Bitcoin offers very high returns over time. Still, he described the asset as looking “too risky” for reserve holdings.
CNB Pilot Portfolio and Study Findings
The Czech National Bank launched a $1 million pilot portfolio in November. The test portfolio includes Bitcoin, a USD stablecoin, and a tokenized deposit. The bank approved the project one month earlier.
The CNB said the pilot aims to gain direct experience with blockchain-based assets. Officials stated these technologies could reshape payment and financial systems. The bank confirmed it became the first central bank to purchase Bitcoin.
Michl said an internal CNB study reviewed Bitcoin’s long-term correlation with traditional assets. The study found that Bitcoin does not move in the same direction as many standard investments. He said this low correlation matters for portfolio design.
“When you add an asset like this, the whole portfolio can work better,” Michl said. He stated returns can rise while overall risk remains similar. He compared Bitcoin to venture capital but described it as more liquid.
The February 2026 study also assessed smaller allocations to Bitcoin and gold. It found Bitcoin could generate higher returns with limited exposure. However, the CNB board decided against investing foreign exchange reserves in Bitcoin at this time.
The board confirmed this decision in the study dated February 2026. Therefore, the CNB will not include Bitcoin in its official FX reserve portfolio. The bank continues to monitor its pilot portfolio results.
