The recently appointed Aleš Michl is the new Czech National Bank (CNB) head and wants to buy billions of euros’ worth of Bitcoin for the nation’s reserves. Under his plan, the bank could hold as much as 5% of its €140 billion ($145.6 billion) in Bitcoin.
According to The Financial Times report, even though the cryptocurrency is known for its volatility, Michl views it as an opportunity for diversifying the bank’s assets, particularly as Bitcoin gains traction from the likes of Bitcoin exchange-traded funds (ETFs) launched by some major financial investment firms such as BlackRock.
Michl’s position reflects a wider trend, with powerful figures like Michael Saylor, the CEO of MicroStrategy, who turned his firm into a major Bitcoin holder. Former President Donald Trump is also getting in on the action and incorporating digital assets into his post-presidency vision. Trump has also signed an executive order to consider a national digital asset stockpile, and Michl views Bitcoin as part of the new global game of financial chess.
Unlike other central bankers who categorize Bitcoin as a speculative bubble, Michl sees it as a potentially smart diversification play but, at the same time, has no illusions about the risks. He knows Bitcoin’s value could plummet, and yet he figures those possible rewards are worth the risk.
The CNB’s reserves are comprised of a mixture of assets, with 22% in stocks, and they will continue to boost their US stock positions. But had the bank kept 5% of its reserves in Bitcoin since October 2013, it would have enjoyed much better returns, although with a whole lot more risk.
Also Read: Arizona Senate Committee Greenlights Bitcoin Reserve Bill
