Update 9:33 a.m. UTC: This article has been updated to include Michl’s statement.
The Czech National Bank (CNB) may become the first European central bank to invest in Bitcoin as part of its diversification strategy for the country’s foreign exchange reserves.
CNB Governor Aleš Michl is set to present his Bitcoin (BTC) acquisition plan to the bank’s board meeting on Jan. 30, he told the Financial Times.
If approved, the investment may amount to over $7.3 billion in Bitcoin purchases, given the CNB’s total reserves of more than $146 billion, according to André Dragosch, head of research at Bitwise.
Dragosch noted the significance of the proposal in a Jan. 29 post on X, writing:
“Just to put this into perspective: These BTC purchases alone would be equivalent to around 5.3 months of newly mined Bitcoin supply.”
International reserves, CNB. Source: André Dragosch
The news comes three weeks after Michl said he was looking at Bitcoin as a potential reserve asset and was considering acquiring “a few Bitcoin” for diversification.
As of Jan. 7, the bank said it was not considering a Bitcoin investment, Janis Aliapulios, an adviser to the board, told Cointelegraph, adding that the bank planned to increase its gold holdings to 5% of its total assets by 2028.
Governor Michl Bitcoin statement. Source: Aleš Michl
While Bitcoin is an interesting asset “worth considering” for a large portfolio, the board of the bank will need to provide “thoughtful analysis,” before making its final decision, wrote Michl in a Jan. 29 X post.
Related: Nvidia slump and $100B crypto IPOs could fuel Bitcoin rally
Trump administration’s crypto regulation to set stage for Bitcoin rally
US President Donald Trump has boosted optimism among crypto investors due to expectations of more regulatory clarity for the cryptocurrency industry.
The Trump administration’s more favorable regulatory environment will bolster Bitcoin’s momentum, Michl told the FT, adding:
“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.”
Related: Arizona Senate moves forward with Bitcoin reserve legislation
While Bitcoin’s prospects for 2025 remain promising, the $36 trillion US debt ceiling recently flashed a critical warning sign for Bitcoin liquidity that may lead to a temporary correction to $70,000 before the next leg up in the market cycle.
GMI Total Liquidity Index, Bitcoin (RHS). Source: Raoul Pal
Bitcoin is set for a “local top” above $110,000 in January before an “interim peak in liquidity” may lead to a deeper correction, according to Raoul Pal, founder and CEO of Global Macro Investor. Pal shared his analysis in a Nov. 29 X post.
Still, analysts remain optimistic in the long term for 2025, with Bitcoin price predictions ranging from $160,000 to above $180,000.
Bitcoin to Surpass Gold in Government Reserves? Coinbase CEO Explains Why. Source: YouTube
Magazine: BTC above $150K is ‘speculative fever,’ SAB 121 canceled, and more: Hodlers Digest, Jan. 19 – 25