The Governor of the Czech National Bank (CNB), Ales Michl, will propose a plan to invest in Bitcoin for the national reserves this Thursday. If approved, the CNB could allocate 5% of its total reserves of 146.13 billion USD to the world's largest cryptocurrency.
Bitcoin - A Diversification Asset?
In an interview with #FinancialTimes (FT), Michl stated that Bitcoin is an asset worth considering to diversify the bank's investment portfolio. He emphasized that Bitcoin currently has an almost zero correlation with bonds, making it an interesting option for a large investment portfolio.
However, Michl is also cautious, stating that this proposal is still in the analysis and discussion stage, and no official decision has been made yet.
"Bitcoin has high volatility, which makes it more challenging to take advantage of its low correlation with other assets."
Storm or Opportunity?
The CNB's interest in Bitcoin comes amid a backdrop of large investment funds like BlackRock launching spot Bitcoin ETFs last year, attracting significant capital inflows from institutional investors.
If Michl's plan is approved, the CNB will become one of the first central banks in the world to officially hold Bitcoin, paving the way for other banks to consider a similar strategy.
However, given the high volatility of Bitcoin, whether the Czech National Bank is willing to bet on this asset remains a big question. The final decision will depend on the Bank Council meeting this Thursday.