Czech Central Bank Warns Bitcoin Could ‘Go to Zero’ Despite Portfolio Benefits

The governor of the Czech National Bank, Aleš Michl, has warned that Bitcoin could either rise significantly in value or fall to zero, emphasizing its extreme volatility compared to traditional assets. Speaking at a Bitcoin 2026 conference, he noted that while Bitcoin has shown strong long-term returns, its risk profile remains unusually high.

Michl explained that all financial assets carry risk, including stocks and bonds, but Bitcoin’s price fluctuations are far more severe. He stressed that investors should avoid concentrating portfolios in a single asset due to the possibility of total loss.

Central Bank Study Finds Potential Portfolio Benefits

The Czech National Bank conducted a study showing that Bitcoin has low long-term correlation with traditional assets such as gold and equities. This means its price often moves independently, which can improve portfolio diversification. The research suggested that adding Bitcoin in small allocations could increase overall returns without significantly raising total risk.

The study also compared Bitcoin to venture capital investments, noting that while it carries high risk, it is far more liquid than private market assets.

$1 Million Test Portfolio and Investment Decision

The Czech National Bank previously created a $1 million experimental portfolio that included Bitcoin, a USD stablecoin, and tokenized deposits to study blockchain-based financial instruments. Despite these findings, the bank’s board decided in February 2026 not to allocate foreign exchange reserves to Bitcoin due to its risk profile.

Michl also shared a personal anecdote, saying his first Bitcoin purchase used to buy coffee would be worth about $350 today, illustrating the asset’s rapid price appreciation and volatility.