Czech central bank head suggests massive Bitcoin investment – FT
Czech National Bank Governor Ales Michl expressed to the Financial Times his intention to allocate 5% of the nation's reserves towards cryptocurrency. Read Full Article at RT.com
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The Czech National Bank's governor, Ales Michl, plans to invest a significant portion of the country's reserves in Bitcoin, as reported by the Financial Times on Wednesday. The value of the cryptocurrency reached a new high earlier this month, coinciding with the inauguration of crypto-friendly US President Donald Trump.
Michl plans to present a proposal to the CNB’s board on Thursday, suggesting that up to 5% of the central bank’s €140 billion reserves be allocated to cryptocurrency. "For the diversification of our assets, Bitcoin seems good," he stated.
The Financial Times characterized this possible move as “groundbreaking,” noting that the CNB could potentially become the first western central bank to hold crypto assets. Michl also commented on the influence of Trump’s administration, saying, “Those [Trump] guys can now kind of create some bubble for Bitcoin, but I think the trend would be an increase without those guys as well, because it’s an alternative [investment] for more people.”
In discussing the volatility of Bitcoin, the governor expressed that he was “ready” for a possible collapse of the cryptocurrency.
Traditionally, central banks hold reserves in conservative assets like US Treasuries and high-yield debt, with few having ventured into cryptocurrencies. The FT pointed out that Bitcoin achieved a record high this month, exceeding $109,000, shortly after Trump assumed office and initiated a working group focused on establishing a national digital asset stockpile.
Bitcoin's value more than doubled last year, partly due to the approval of spot Bitcoin exchange-traded product shares by a US regulator. Michl believes that within the next five years, more central banks will likely follow suit, as both funds and commercial banks increase their investments in crypto.
In a recent statement, BlackRock CEO Larry Fink suggested that if institutions allocate between 2% and 5% of their portfolios to Bitcoin, its price could soar to $700,000.
Since its introduction in 2009, Bitcoin has facilitated peer-to-peer transactions over the internet without relying on traditional banking. Its decentralized nature attracts those searching for alternatives to government-backed currencies, but this same feature has drawn criticism for its potential use in illegal activities such as money laundering and financing terrorism.
Numerous factors, including supply and demand, market availability, competition from other cryptocurrencies, and investor sentiment, influence Bitcoin’s value. Despite its increasing acceptance in commerce, Bitcoin exists in a regulatory gray area, as there are no uniform international laws governing its use.
El Salvador adopted Bitcoin as an official currency in 2021, although many governments remain cautious, highlighting the risks tied to investing in such a volatile asset.
Aarav Patel for TROIB News
Michl plans to present a proposal to the CNB’s board on Thursday, suggesting that up to 5% of the central bank’s €140 billion reserves be allocated to cryptocurrency. "For the diversification of our assets, Bitcoin seems good," he stated.
The Financial Times characterized this possible move as “groundbreaking,” noting that the CNB could potentially become the first western central bank to hold crypto assets. Michl also commented on the influence of Trump’s administration, saying, “Those [Trump] guys can now kind of create some bubble for Bitcoin, but I think the trend would be an increase without those guys as well, because it’s an alternative [investment] for more people.”
In discussing the volatility of Bitcoin, the governor expressed that he was “ready” for a possible collapse of the cryptocurrency.
Traditionally, central banks hold reserves in conservative assets like US Treasuries and high-yield debt, with few having ventured into cryptocurrencies. The FT pointed out that Bitcoin achieved a record high this month, exceeding $109,000, shortly after Trump assumed office and initiated a working group focused on establishing a national digital asset stockpile.
Bitcoin's value more than doubled last year, partly due to the approval of spot Bitcoin exchange-traded product shares by a US regulator. Michl believes that within the next five years, more central banks will likely follow suit, as both funds and commercial banks increase their investments in crypto.
In a recent statement, BlackRock CEO Larry Fink suggested that if institutions allocate between 2% and 5% of their portfolios to Bitcoin, its price could soar to $700,000.
Since its introduction in 2009, Bitcoin has facilitated peer-to-peer transactions over the internet without relying on traditional banking. Its decentralized nature attracts those searching for alternatives to government-backed currencies, but this same feature has drawn criticism for its potential use in illegal activities such as money laundering and financing terrorism.
Numerous factors, including supply and demand, market availability, competition from other cryptocurrencies, and investor sentiment, influence Bitcoin’s value. Despite its increasing acceptance in commerce, Bitcoin exists in a regulatory gray area, as there are no uniform international laws governing its use.
El Salvador adopted Bitcoin as an official currency in 2021, although many governments remain cautious, highlighting the risks tied to investing in such a volatile asset.
Aarav Patel for TROIB News
