Central banks and institutional investors are increasingly scrutinizing Bitcoin’s role in the financial system, with recent developments highlighting both curiosity and concern. The Czech National Bank (CNB) is exploring Bitcoin as a potential reserve asset, signaling a shift in how central banks view the cryptocurrency. Meanwhile, Bitcoin’s price has remained range-bound despite significant institutional inflows, prompting discussions about potential market manipulation.
Czech National Bank Governor Advocates Bitcoin Research, Opening Doors for Potential $7 Billion Investment
In a bold shift from traditional central banking perspectives, Aleš Michl, governor of the Czech National Bank (CNB), has called for a deeper study of Bitcoin's underlying technology and economic impact. His remarks, shared in a Feb. 19 post on X, signal a potential transformation in how central banks approach the world's largest cryptocurrency. While financial institutions have historically been hesitant about Bitcoin due to its volatility, Michl argues that studying Bitcoin could ultimately strengthen central banks rather than harm them.
Unlike other cryptocurrencies, Bitcoin should not be "lumped together" with the broader digital asset market, according to Michl. His stance suggests a growing recognition of Bitcoin’s decentralized, trustless architecture as fundamentally distinct from the thousands of alternative cryptocurrencies that have emerged. "We central bankers should study it and explore the technology it is built on. Studying Bitcoin won’t harm us—on the contrary, it will strengthen us," he wrote.
The statement comes just weeks after Michl proposed the creation of a Bitcoin "test portfolio" during a CNB board meeting on Jan. 30. His proposal suggests a willingness to not only analyze Bitcoin conceptually but also experiment with it as a reserve asset. Michl described this step as an effort to learn about and evaluate this "highly risky alternative asset."
If Michl's proposal is approved, the CNB could become the first European central bank to invest directly in Bitcoin. The proposed investment could be substantial—amounting to over $7.3 billion, based on the bank's total reserves of more than $146 billion.
André Dragosch, head of research at Bitwise, highlighted the significance of such an investment in a Jan. 29 post on X, noting that these Bitcoin purchases would be equivalent to approximately 5.3 months of newly mined Bitcoin supply. The sheer scale of the proposed allocation demonstrates the CNB’s willingness to think beyond traditional financial instruments in a rapidly evolving economic landscape.
Bitcoin's strong performance in 2024 further supports its growing appeal to institutional investors. With a 130% return year-to-date, the asset has become increasingly difficult for financial institutions to ignore. This has led to greater interest in Bitcoin as a potential hedge against inflation, currency devaluation, and geopolitical instability.
Potential Challenges and Strategic Considerations
Despite the enthusiasm surrounding Bitcoin’s price gains, Michl has made it clear that the CNB’s exploration of Bitcoin remains in the early stages. He emphasized that this is only the "initial stage of the analysis" and that any final decision will depend on comprehensive research and thoughtful evaluation by the CNB’s board.
For a central bank, investing in Bitcoin presents both opportunities and risks. Bitcoin's decentralized nature and fixed supply make it an attractive hedge against inflation and fiat currency depreciation. However, its price volatility and regulatory uncertainty pose significant challenges for any institution managing national reserves.
Additionally, Bitcoin’s price remains susceptible to macroeconomic forces, including ongoing trade tensions between the United States and China. According to Vugar Usi Zade, chief operating officer at Bitget, Bitcoin’s resilience in the face of such economic pressures is notable.
Michl’s approach marks a significant departure from the traditionally cautious stance taken by most central banks regarding Bitcoin. While some central banks have experimented with blockchain technology and central bank digital currencies (CBDCs), few have seriously considered Bitcoin as a reserve asset.
If the CNB moves forward with its Bitcoin investment, it could set a precedent for other central banks in Europe and beyond. In an era of rising inflation, banking crises, and geopolitical uncertainty, Bitcoin’s appeal as an independent, non-sovereign store of value may gain traction among financial policymakers.
As the CNB embarks on its Bitcoin study, the outcome of this initiative could shape the future of central bank reserve strategies. While still in its early stages, the potential inclusion of Bitcoin in the CNB’s reserves would be a historic moment for both the cryptocurrency and traditional finance industries. Whether other central banks will follow suit remains to be seen, but one thing is clear: Bitcoin is increasingly becoming a topic that financial institutions can no longer afford to ignore.
Concerns Mount Over Bitcoin Market Manipulation as Price Remains Range-Bound
Bitcoin’s prolonged period of stagnant price movement has raised concerns about possible market manipulation, as the cryptocurrency remains locked in a tight trading range despite massive institutional inflows. While Bitcoin’s adoption continues to grow, its price action remains suspect, prompting speculation that artificial suppression may be at play.
Bitcoin (BTC) has been trading between the $92,400 support level and the $106,500 resistance level since Dec. 18. The cryptocurrency has failed to break out of this range, with only a brief surge following US President Donald Trump’s inauguration on Jan. 20, when Bitcoin touched an all-time high of $109,000 before retreating back into its established range.
Samson Mow, CEO of Jan3 and founder of Pixelmatic, has suggested that Bitcoin’s recent price movements could be a sign of price suppression rather than natural market behavior. Speaking at Consensus Hong Kong 2025, Mow highlighted the unusual nature of Bitcoin’s consolidation pattern.
“It seems like it’s some sort of price suppression,” Mow stated. “If you look at the price movement, we peak, and then we stay steady and chop sideways. And it’s good, you can say it’s consolidation, but it just looks very manufactured.”
Mow emphasized that Bitcoin’s trading pattern in this range appears unnatural, adding, “The very tight range in which you’re trading just doesn’t look natural at all.”
Despite Bitcoin’s stagnation, market analysts remain bullish on its long-term prospects. Forecasts for Bitcoin’s price in 2025 range from $160,000 to above $180,000, based on increasing adoption and institutional investment. However, the lack of immediate upside movement in response to strong institutional demand has led to further speculation about market manipulation.
The launch of spot Bitcoin exchange-traded funds (ETFs) in the US and major purchases by firms like Michael Saylor’s MicroStrategy have significantly increased institutional Bitcoin holdings. According to Mow, these entities are purchasing Bitcoin at a rate that far exceeds the daily mining supply.
Given this accumulation, Mow posed a critical question: “If Bitcoin’s price isn’t moving despite institutions and retail buyers accumulating BTC, then someone must be selling.”
He further elaborated, “And you’ve got retail buyers who are dollar-cost averaging and buying, and because the price is set at the margin, so that means somebody has to be selling.”
FTX Repayments and Potential Selling Pressure
One potential source of selling pressure could be related to the collapse of FTX. The now-defunct crypto exchange has started repaying its creditors, distributing over $1.2 billion in settlements. However, the repayments are based on Bitcoin’s price from November 2022, when BTC was trading near $20,000.
This discrepancy has led to concerns that recipients of these repayments may be looking to cash out at significantly higher prices, potentially contributing to the current selling pressure. Mow suggested that FTX’s asset liquidation strategy could be exacerbating Bitcoin’s price stagnation.
While speculation about artificial price suppression grows, Bitcoin has shown resilience in the face of macroeconomic uncertainty. Ongoing trade tensions between the US and China, potential interest rate cuts, and increased regulatory scrutiny continue to shape the broader market environment.
If Bitcoin successfully breaks out of its current trading range, it could signal the end of a period of consolidation and the beginning of a new bullish phase. However, until that happens, market participants will remain watchful of signs of potential manipulation and selling pressure.
The coming months will be critical in determining whether Bitcoin can reclaim its bullish trajectory or if external factors will continue to suppress its price action. For now, industry players and investors alike are keeping a close eye on the market, waiting to see if Bitcoin’s long-anticipated breakout will finally materialize.
