Switzerland’s central bank has rejected calls for it to create a strategic Bitcoin (BTC) reserve and add the largest cryptocurrency to its balance sheet.
In rejecting the proposal, the Swiss National Bank cited concerns over the market liquidity and volatility of digital assets such as Bitcoin. “Cryptocurrencies are known for their high volatility, which is a risk for long term value preservation,” said Swiss National Bank President Martin Schlegel at the institution’s General Assembly meeting.
The Bitcoin Initiative, a crypto advocacy group, had lobbied for the Swiss central bank to add BTC to its treasury, arguing that it would complement its overall portfolio and yield substantial returns. Without Bitcoin, the Swiss National Bank’s investments have grown by 10% since 2015. A 1% BTC allocation would have nearly doubled that return, argued the Bitcoin Initiative.
Too Risky
The Swiss National Bank rejected the proposal, countering that Bitcoin remains too risky for the central bank and Switzerland’s currency. European Central Bank (ECB) President Christine Lagarde has repeatedly criticized Bitcoin, saying it is “worth nothing” and urging countries to stay away from crypto.
Across Europe, other central banks have also rejected the idea of building a strategic Bitcoin reserve. In February, Poland’s central bank ruled out keeping reserves in Bitcoin. And the Romanian central bank has warned banks not to issue loans to crypto companies. BTC is currently trading at $93,700, having declined a slight 0.32% on the year.
Is BTC a Buy?
Most Wall Street firms don’t offer ratings or price targets on Bitcoin, so we’ll look at the cryptocurrency’s three-month performance instead. As one can see in the chart below, the price of BTC has declined 9.50% in the last 12 weeks.
