Major cryptocurrencies took another downswing overnight, but have regained support into the morning of the European session amid news that the Czech National Bank wants to buy a large holding of bitcoin.
Czech National Bank governor Aleš Michl wants to buy and hold up to 5% of its €140 billion of reserves – €7 billion – in bitcoin, he told the Financial Times.
Such a move, which Michl said was putting a proposal to diversify reserves in this way to the bank board this week, would make the central bank the first in the West known to hold crypto assets.
He said that while on the downside bitcoin exhibits "extreme volatility", he noted that institutional investor interest was growing since the launch of bitcoin exchange traded funds last year.
The Chech central banker noted that US President Donald Trump's move last week to evaluate the creation of a national digital asset stockpile.
“For the diversification of our assets, bitcoin seems good,” Michl told the FT.
Central banks traditionally hold gold, government bonds such as US Treasuries, corporate bonds and equities.
Analysts at Saxo said 5% Bitcoin allocation by th Czech central bank would mark a "potential breakthrough for institutional adoption" of cryptocurrencies.
Earlier this month the Bank of England provided an update on the digital pound, the central bank digital currency that it has been considering, which would be designed to be stable and retain its value over time.
It said "no decision has been made on whether to proceed with a digital pound" but the design phase will be completed over the next couple of years, and then the Bank and government will assess the policy case for a digital pound and determine whether or not to proceed.
Crypto prices
Bitcoin is down 0.2% over 24 hours at $102,397.67, having sunk to $100.2K overnight and below $100K earlier in the week.
Crypto stocks struggled in New York trading, with MicroStrategy down 3.45% and Riot down 4.4%, but both are higher in pre-market trading on Wednesday.
Ethereum is down 1.9%, XRP 2.6% and solana 3%.
The Official Trump memcoin was down 7.8% over the day and 34% lower over a week, while memecoins gaining popularity included Dogwifhat and Fartcoin, up 16% and 10% over 24 hours.
The biggest riser over seven days is Onyxcoin, up 147%, followed by MANTRA, up 28.5%.
In ETF news, WisdomTree reduced the fee for European customers for its Physical Bitcoin ETP (BTCW) to 0.25%, effective from 3 February, aligning with its US-listed spot bitcoin ETF fee.
The $1.1bn WisdomTree Physical Bitcoin fund led the European bitcoin ETF market in 2024, attracting $232 million in net new flows, while WisdomTree was the overall fund leader in European crypto flows last year, bringing in $520 million of net new flows across its $1.7bn range of crypto ETPs.