Following the announcement by the Czech National Bank governor Aleš Michl that he wanted to invest as much as 5% of the country’s reserves into Bitcoin, ECB President Christine Lagarde retaliated by stating that she was confident that no Bitcoin would enter the reserves of any of Europe’s central banks.
Europe to continue towards CBDCs
Europe is continuing to follow the path towards Central Bank Digital Currencies (CBDCs) despite the recent sea change in the United States, sparked by President Trump’s new administration. One of President Trump’s first actions was to sign an executive order that completely bans CBDCs in the US.
However, many European governments must be eyeing what could be a panacea to their debt-ridden monetary system, and some may already be investigating the pros and cons of Bitcoin, and the potential consequences of not being among the first to adopt this asset.
Czech Central Bank could add Bitcoin to its reserves
That said, one European country, outside of the Eurozone, is the Czech Republic. A recent article in the Financial Times quoted its central bank governor as saying “I like profitability”. He stated that he was going to present a plan to the board of the CNB, in which he outlines his intention to “diversify” the reserves by adding up to 5% in Bitcoin.
Such an action would be a huge thorn in the side of Christine Lagarde and her fellow central bankers. Any European country that might start investing in Bitcoin could push the European bloc onto a slippery slope where more and more of its members start to adopt this asset.
Michl is not surprised that his country could be the first in Europe to add Bitcoin to its reserves, saying that he has a “totally different philosophy” to his fellow central bank colleagues.
In a Reuters article, Lagarde was quoted as saying that she had had a “good conversation” with Michl, and that he had agreed that a central bank’s assets should be “liquid, secure and safe”.
Nevertheless, the Czech central bank board announced on Thursday that it had agreed to investigate the addition of other assets into its reserves, without mentioning that Bitcoin could be one of these assets.
$BTC bulls battle to hold $104,400
Source: TradingView
The short-term chart for $BTC shows how the price is still battling to take hold above the $104,400 resistance. A dip later in the day on Thursday saw the bears take the price back under the resistance, but this was short-lived and a candle was not able to close below. The price has since bounced off of the small ascending trendline and may continue higher.
$BTC positive 5-day candle close
Source: TradingView
By looking at the 5-day chart for $BTC, one is often able to foresee what is coming on the weekly chart. Here it can be seen that the last 5-day candle was able to close above the major $104,400 horizontal resistance, thereby turning it into support. That said, it will be good to see this next 5-day candle also hold above. On top of this, the weekly candle will close on Sunday. If all this can occur, watch out for the next potentially explosive surge to the upside. $120,000 would be the target.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
