ECB President Lagarde Doubts EU Bitcoin Reserves but Optimism Remains

Key Points

• ECB’s President Lagarde believes that none of the EU’s countries will add BTC to its monetary reserves.
• Meanwhile, the Czech National Bank approved a proposal to assess investments in Bitcoin.

Today, the European Central Bank President, Christine Lagarde, hinted at more rate cuts, while ruling out Bitcoin reserves in the EU. Meanwhile, the Czech National Bank brings crypto-related optimism in Europe, while the US Fed also showed BTC and crypto support yesterday.

More Easing If Inflation Declines

On January 30, the ECB cut rates by 25 bps to 2.75%, signaling further easing if inflation declines, according to the latest reports from Euro News .

She hinted that the path for further rate cuts is clear, as financing conditions remain respective amidst an economy that stagnated in Q4 of 2024.

According to the same reports, Lagarde indicated that the ECB will continue to adopt a data-dependent approach, highlighting that more rate cuts are underway if inflation continues to decline and the economic conditions warrant additional support.

She also addressed speculation about the ECB holding Bitcoin as a reserve asset.

Bitcoin’s Volatilty and Risks Addressed

Lagarde said that reserves have to be liquid, secure, and safe, adding that Bitcoin doesn’t meet these criteria due to its volatile nature and potential risks.

Bloomberg also noted that Lagarde said that BTC will not enter the reserves of any central bank of the General Council of the ECB.

Her remarks came following the interest rate cut decision while responding to comments by Ales Michl, the fifth Governor of the Czech National Bank who recently addressed Bitcoin investments.

Proposal to Analyze Additional Investments Including BTC, Approved

Bloomberg also highlighted that Michl told the Financial Times this week that the Czech National Bank’s Board was expected to discuss a proposal to buy BTC and it could represent 5% of its reserves.

On X, he said that BTC has significant volatility, but he still considers assessing its potential role in the national reserves. He also noted that BTC currently has zero correlation to bonds and it’s an interesting asset for a large portfolio.

Michl explained that the Czech National Bank’s goal is price stability, and when they took office in July 2022, inflation was 17.5%, but now it’s down to target. Bitcoin is currently under consideration amidst a plan to diversify reserves.

Earlier, he confirmed that at today’s meeting, after discussing a document on international reserve management in 2024, the Bank Board of the Czech National Bank (CNB) approved the proposal to analyze the options for investing in additional asset classes.

The Czech Republic is in the EU but not a member of the Eurozone, as Bloomberg noted.

While they consider adding Bitcoin to National Reserves, amidst Lagarde’s statements, Bitcoin is also seeing support from US Fed Chair, Jerome Powell, highlighted by EuroNews.

US Fed Chair Shows Crypto Support

Yesterday, during the FOMC meeting, Powell stated that banks are perfectly able to serve crypto customers, as long as they understand and can manage the risks.

He also advocated for clearer regulations and said that it would be helpful if there were a greater regulatory apparatus around digital assets and this is something that Congress was working on quite a lot.

Meanwhile, Bitcoin price rebounded above $106,000 today amidst optimism , political support, and increasing institutional adoption.