The Czech National Bank (CNB) could become the first central bank in Europe to allocate funds to Bitcoin as part of its strategy to diversify the country’s foreign exchange reserves.

CNB Governor Aleš Michl plans to present his Bitcoin acquisition proposal at the bank’s board meeting on Jan. 30, as he revealed to the Financial Times.

If approved, the investment could involve Bitcoin purchases exceeding $7.3 billion, considering the CNB’s total reserves of more than $146 billion, according to André Dragosch, head of research at Bitwise.

In a Jan. 29 post on X, Dragosch highlighted the scale of the potential investment, stating:

“Just to put this into perspective: These BTC purchases alone would be equivalent to around 5.3 months of newly mined Bitcoin supply.”

This development follows Michl’s earlier remarks three weeks prior, when he mentioned exploring Bitcoin as a reserve asset and considering acquiring “a few Bitcoin” for diversification.

However, as of Jan. 7, the bank had stated that a Bitcoin investment was not under consideration, according to Janis Aliapulios, an adviser to the board. Aliapulios also told Cointelegraph that the CNB intended to increase its gold holdings to 5% of total assets by 2028.

While Bitcoin is an asset that is “worth considering” for a large portfolio, Michl emphasized in a Jan. 29 post on X that the board would need to conduct a “thoughtful analysis” before making any final decisions.

Optimism within the crypto market has been fueled by expectations that US President Donald Trump will bring greater regulatory clarity to the cryptocurrency sector.

Michl told the Financial Times that a more favorable regulatory approach from the Trump administration would further strengthen Bitcoin’s position. He added:

“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.”

Although Bitcoin’s long-term outlook for 2025 remains strong, the $36 trillion US debt ceiling recently signaled a potential liquidity issue that could trigger a short-term pullback to $70,000 before the market resumes its upward trend.

According to Raoul Pal, founder and CEO of Global Macro Investor, Bitcoin is expected to reach a “local top” above $110,000 in January before an “interim peak in liquidity” could lead to a deeper correction. Pal shared his insights in a Nov. 29 post on X.

Despite potential fluctuations, analysts maintain a bullish outlook for 2025, with Bitcoin price projections ranging between $160,000 and over $180,000.

Sources:

https://cointelegraph.com/news/czech-national-bank-governor-proposes-7b-bitcoin-reserve-plan

https://www.ft.com/content/a3c06f8f-34ad-4065-bcf4-97670230824f

https://x.com/Andre_Dragosch/status/1884483844063002764/photo/1

https://x.com/michliq_/status/1884527230954647667

https://x.com/RaoulGMI/status/1862521182446109032