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The Czech National Bank proporse to establish a Bitcoin reserve which could make it the first European central bank to officially hold Bitcoin in its reserves. The proposal, led by CNB Governor Aleš Michl, suggests allocating up to 5% of the country’s $146 billion in foreign exchange reserves to Bitcoin, a move that could total $7.3 billion in BTC investments.
If approved, this Bitcoin reserve plan would mark a historic shift in monetary policy, positioning Bitcoin as a legitimate store of value alongside traditional assets like gold and foreign currencies.
Governor Michl is set to present the Bitcoin reserve plan at a CNB board meeting on January 30, according to an exclusive report by the Financial Times.
If successful, the Czech Republic could lead the way in Bitcoin adoption at the central banking level, challenging long-standing policies against holding cryptocurrencies in sovereign reserves.
“This move would be groundbreaking,” said André Dragosch, head of research at Bitwise, in a post on X (formerly Twitter). “These BTC purchases alone would be equivalent to around 5.3 months of newly mined Bitcoin supply.”
The CNB’s potential Bitcoin acquisition follows growing global interest in digital assets as reserve holdings. In a January 29 post, Dragosch emphasized that such a purchase could significantly impact Bitcoin’s liquidity, potentially driving prices higher in the mid to long term.
The timing of the Bitcoin reserve plan aligns with increasing concerns over global economic instability, including inflation, currency devaluation, and mounting national debts.
Governor Michl previously hinted at Bitcoin’s potential role in national reserves, stating earlier this month that he was considering buying “a few Bitcoin” for diversification purposes. However, the new $7.3 billion Bitcoin allocationsuggests a far more aggressive approach to adopting the digital asset.
Financial analysts believe this could be a watershed moment for Bitcoin’s role in national finance.
“Central banks have been diversifying their reserves for years—gold, foreign currencies, sovereign bonds,” said Raoul Pal, founder of Global Macro Investor. “Adding Bitcoin is just the next logical step. If the CNB follows through, we could see more central banks joining the movement.”
Bitcoin’s inclusion in national reserves has long been debated, but no major central bank has yet taken the leap. The Czech Republic’s decision could set a precedent for other European nations to follow suit.
Governor Michl also acknowledged that Bitcoin’s regulatory landscape in the U.S. could impact global adoption. He pointed to U.S. President Donald Trump’s influence on Bitcoin’s institutional acceptance, 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.”
The Biden administration has been largely cautious on cryptocurrency regulation, but analysts predict a second Trump term could fast-track Bitcoin-friendly policies.
The Bitcoin reserve plan is also reminiscent of moves made by smaller nation-states like El Salvador, which adopted Bitcoin as legal tender in 2021. However, no European central bank has yet taken the step of holding BTC in its reserves.
Several U.S. states, including Arizona, have recently proposed legislation to allow Bitcoin as a reserve asset, signaling growing government interest in the asset. A successful Bitcoin investment by the CNB could set off a domino effect, encouraging other central banks to consider similar strategies.
According to Michael Saylor, executive chairman of MicroStrategy, central banks will eventually have no choice but to allocate part of their reserves to Bitcoin:
“Bitcoin is the hardest asset known to mankind. Once governments recognize its value, it will become a global reserve asset alongside gold.”
Bitcoin’s Price Projections for 2025 Amid Institutional Adoption.
While the Bitcoin reserve plan could create bullish momentum, some analysts caution that short-term price correctionsare still possible.
Raoul Pal recently predicted that Bitcoin could see a “local top” above $110,000 before experiencing a correction, possibly dipping to $70,000 before another major leg up. However, long-term forecasts remain highly optimistic, with 2025 price targets ranging from $160,000 to $180,000.
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