First central bank to test bitcoin says asset is ‘too risky’ for reserves

The Czech Central Bank purchased $1 million in bitcoin in October to run tests and conduct a study and found it is more efficient than stocks and gold but much too risky.

What to know:

• Czech central bank governor Aleš Michl said adding bitcoin to reserves could improve portfolio performance but stressed its extreme volatility and risk, including the possibility it could go to zero.
• A Czech National Bank study found bitcoin’s low long-term correlation with traditional assets can enhance returns without significantly increasing overall risk, likening it to a more liquid form of venture capital.
• Despite these potential benefits and a $1 million test portfolio that includes bitcoin, the CNB’s Bank Board decided in February 2026 not to invest the country’s foreign-exchange reserves in bitcoin.

In this article

BTCBTC$76,924.12◢0.96%

The Czech Republic’s central bank governor, Alex Michl, said that adding bitcoin BTC$76,924.12 to the financial institution’s reserves could improve performance, but warned its volatility is much higher than other assets and therefore represents a risk.

“Its volatility is much higher than other assets,” Michl said in a speech at the Bitcoin 2026 conference in Las Vegas on Tuesday. “One day its price may be much higher or it could go to zero. Yes, zero”.

Michl acknowledged that all assets face the risk of losing their entire value, which is why banks have portfolios. “A stock can go to zero. Even a bond can fail. So for me that is why it is not wise to bet just on one asset.”

“The first time I used bitcoin, I bought a coffee. Today. that coffee comes to about $350, so it was the most expensive coffee of my life.”

However, he insisted that while bitcoin through time shows “very high returns, but honestly it looks too risky.”

The Czech National Bank became the first central bank worldwide to purchase bitcoin in November as it announced the creation of a $1 million test portfolio that includes BTC, a USD stablecoin, and a tokenized deposit. Approved by the CNB’s bank a month prior, the pilot was aimed at acquiring hands-on experience with blockchain-based assets, which it said could redefine how the country’s payments and financial systems operate in the future.

A CNB study, he said, found that because bitcoin has low long-term correlation with many traditional assets, it does not move in the same direction and that is important.

“When you add an asset like this, the whole portfolio can work better. Return can go up and risk stays about the same,” he explained, adding that over the long term, “bitcoin can provide returns that are not closely linked to other assets. In some ways it is similar for me to venture capital but it is much more liquid.”

However, despite finding that bitcoin has the potential to drive higher returns with smaller allocations even more so than gold, “the CNB's Bank Board decided not to invest its FX reserves in bitcoin at this time,” the study dated February 2026 states.

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