Ales Michl, the governor of the Czech National Bank (CNB), told the Financial Times that he would propose buying Bitcoin for the board at their next meeting.
This Thursday’s CNB meeting might see the bank agreeing to allocate 5% of its $140 billion reserve to buy Bitcoin.
Michl acknowledged that institutional interest in cryptocurrencies is increasing, citing BlackRock’s Bitcoin ETF launch.
While agreeing that Trump’s ascent to the 47th President of the United States bodes well for cryptocurrencies, Michl believes that Bitcoin has carved out a niche for itself as an alternative investment.
The Central Bank’s Investment Figures
Ales Michl, one of the few European bankers with a contrarian view on Bitcoin, believes the Czech National Bank should look beyond Treasury bills and bonds for investment opportunities.
Although he acknowledges the risks associated with Bitcoin, he believes it is worth taking.
Analyzing the situation, he explained that investing just 5% of its foreign reserves in Bitcoin over the past decade could have been a worthy bet, with returns above 3.5% annualized.
He also understands the impact of their investment on Bitcoin’s price, both sentimental and financial standpoint. “Five percent [of our assets] is a lot of money, even for the Bitcoin market,” he said.
The central bank’s €140 billion foreign exchange reserves equal 45 percent of the country’s GDP. So, the proposed Bitcoin investment would be 2.25 percent of the country’s GDP.
The CNB is already in the limelight for its aggressive portfolio. Thirty percent of the nation’s foreign investments are in US equities, and Michl sees that figure rising to 50%. However, he explained the need to buy in phases, as prices are high.
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