European Central Bank (ECB) President Christine Lagarde stated that Bitcoin (BTC) is unlikely to be adopted as a reserve asset by EU banks. This follows the Czech National Bank's (CNB) proposal to allocate 5% of public funds to Bitcoin as part of its reserve diversification strategy.

The CNB was set to review this proposal on January 30, with the potential investment exceeding $7.3 billion, based on its $146 billion in total reserves.

ECB Opposes Bitcoin, EU Pursues Digital Euro

During the January 30 conference, Lagarde reaffirmed that Bitcoin would not meet the ECB’s criteria for reserves, which prioritize liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term, security, and stability. However, other EU countries, including Poland, Slovenia, Switzerland, Germany, and the Czech Republic, have explored Bitcoin reserve options.

The President of the European Central Bank says there will be No strategic Bitcoin reserves.

She emphasizes reserves must be liquid, secure & safe.

In case you did not know,

Reserves will be "Reserved" for utility digital assets. pic.twitter.com/5Eu2OU0x2W

— Vandell | Black Swan Capitalist (@vandell33) January 30, 2025

Meanwhile, the US has banned central bank digital currencies (CBDCs) through an executive order by former President Donald Trump, while the EU continues its Digital Euro project to compete with dollar-pegged stablecoins.

CNB Considers Bitcoin in Reserve Strategy

CNB Governor Aleš Michl, who proposed the Bitcoin initiative, expressed confidence in Bitcoin’s long-term value despite its volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad Read this Term. He has emphasized the need for reserve diversification and noted that Bitcoin could play a role in this strategy. No changes will be made until further analysis is completed.

Czech National Bank May Allocate Up to 5% of Reserves to Bitcoin as Part of Diversification Strategy, Potentially Acquiring BTC Worth Around $7.3 Billion
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💰Coin:
BTC ( $BTC ) $102,719.10
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NFA. pic.twitter.com/lnX44WiIyH

— COINOTAG NEWS (@coinotagen) January 29, 2025

On Thursday, the CNB board approved a proposal to explore investing reserves in additional asset classes, with Michl suggesting that Bitcoin could be considered for diversification, Coindesk reported.

"My goal is to diversify the portfolio, so if bitcoin is good [for that], then let’s have it," said Michl.

BTCUSD Bounces Off Trendline, Support Formed

BTCUSD has been trending upward, following a trendline on the H1 chart. The price has bounced multiple times off the trendline's support. As of now, it appears to have found horizontal support at 104,000. This suggests that BTCUSD is receiving support from a confluence area, which may attract more buyers and drive the price further upwards.

Meanwhile, DeepSeek AI has presented three potential scenarios for Bitcoin's price in 2025. In its base case, Bitcoin is projected to trade between $100,000 and $150,000, reported by Finance Magnates. A more optimistic scenario, termed "hyperbitcoinization," suggests a potential rise to $350,000. In an extreme case, Bitcoin could reach $500,000. These projections are based on expectations of increased institutional participation and broader blockchain adoption in global finance.