The newly appointed head of the Czech National Bank (CNB), Aleš Michl, has big hopes for the country’s financial future. Bitcoin of that amount would be worth up to €7 billion ($7.28 billion) and he wants the bank to invest 5% of its reserves, which comes to close to €7 billion. The reserves of CNB are currently worth €140 billion ($145.6 billion).
While it is widely known for wild price swings, Michl says this Bitcoin (and other cryptocurrencies) validates as a way to diversify an asset portfolio. Bitcoin’s rising popularity also attracts him because major investment firms such as BlackRock have just launched Bitcoin related exchange traded funds (ETFs).
Michl isn’t alone in that view. Bitcoin has seen major investments from a ton of powerful figures such as Michael Saylor, chief executive of MicroStrategy, which was an early bull on the cryptocurrency. According to a report published about him in Wired, even former President Donald Trump is considering digital assets of his own. Bitcoin is becoming a player in the big global financial game, Michl says.
Unlike other central bankers who think Bitcoin is a risky gamble, Michl views it as the possible smart way to spread the bank’s investments. Yet he’s willing to bet that the value of Bitcoin may come down, though the potential for higher rewards is worth it to him.
The CNB’s reserves it currently holds include 22% in stocks, and it intends to keep growing its US stock holdings. Had the bank put 5% of its reserves in Bitcoin back in 2013, it would have had much higher returns, with much more risk.
This is the first step where even traditional financial institutions have started taking notice of digital currencies and, hopefully, more countries follow the path.
Also read: Arizona Senate Committee Approves Bitcoin Reserve Bill in Important Vote
