A Central Bank Just Said They Want To Buy Billions In Bitcoin
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To investors,
There is a story in the Financial Times this morning titled “Head of Czech central bank wants it to buy billions of euros in bitcoin.” This may come as a surprise to many investors, but I am actually surprised it has taken this long.
President Donald Trump has been talking for months about his plan to establish a strategic bitcoin reserve for the United States. El Salvador owns hundreds of millions of dollars in bitcoin and continues to buy at least one bitcoin per day. And the country of Bhutan has approximately $1.3 billion of bitcoin on their balance sheet, which is almost 50% of their total GDP for the nation.
We also know that Russian President Vladimir Putin has discussed his country’s activities in mining bitcoin and using the digital currency for payments with other countries. So given all these public disclosures, combined with the leader of the free world suggesting the United States is going to make a large move, you would think many other countries would have been already front-running America in their bitcoin purchases.
My guess is various countries are buying bitcoin and not disclosing it yet.
The incentive would be to buy as much bitcoin as you can before you ever announce anything. If you announce your intentions to buy before you actually do it, then you risk pushing the price higher and costing your country cheaper bitcoin.
This brings me back to the Czech central bank announcement. We don’t know if it will be approved, but the two most interesting aspects to me is (1) the head of the central bank is suggesting this rather than a low-level employee and (2) the suggested target allocation is 5% instead of a measly 1-2%.
Part of the logic for the central bankers proposal is that bitcoin “has zero correlation to bonds and is an interesting asset for a large portfolio.” He is making a portfolio construction argument — this feels like a much higher probability argument to make in the institutional investment world.
Ales Michl responded to the article going viral with the following statement on X:
“Czech National Bank’s goal is price stability. When we took office in July 2022, inflation was 17.5%. We brought it down to target. We are also diversifying reserves—gradually increasing gold holdings from 0% to around 5% and planning for 30% in equities. An asset under consideration is Bitcoin. It currently has zero correlation to bonds and is an interesting asset for a large portfolio. Worth considering. Right now, it’s only at the stage of analysis and discussion. The Bank Board decides, and no decision is imminent.
Thoughtful analysis is needed.
Bitcoin has significant volatility, which makes it harder to take advantage of its current low correlation with other assets. That’s why I will ask our team on Thursday to further assess Bitcoin’s potential role in our reserves. Nothing more, nothing less.
The article is very accurate, including my statement that Bitcoin could one day be worth either zero or a huge amount.”
Similar to the US working group that is “studying” the potential bitcoins strategic reserve, the Czech National Bank is analyzing whether this makes sense for them or not. My prediction is both countries will conclude they need to hold bitcoin.
If countries start buying bitcoin, especially billions of dollars at a time, we should be in store for a fun 2025. Bitcoiners have been saying for years the digital currency would eventually be adopted by nation states. It looks like they are going to be right again.
An idea’s time has come. Countries aren’t going to stay on the sidelines for much longer.
Hope you all have a great day. I’ll talk to everyone tomorrow.
- Anthony Pompliano
Founder & CEO, Professional Capital Management
Will President Trump Buy Bitcoin & End Income Tax?
Polina Pompliano, Author of ‘Hidden Genius’ and Founder of The Profile, and Anthony Pompliano, Author of ‘How To Live An Extraordinary Life’ and CEO of Professional Capital Management, discuss bitcoin, strategic national reserve, what Donald Trump is likely to do, idea of removing federal income tax, government spending, and the impact of DeepSeek on America.
Enjoy!
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The domino's will fall soon enough! Bitcoin cannot be stopped.