The Swiss National Bank (SNB) has firmly rejected proposals to incorporate Bitcoin into Switzerland’s national reserves, with bank leadership citing concerns over cryptocurrency market conditions that they believe make it unsuitable for central bank holdings.

SNB President Voices Concerns About Crypto Volatility and Liquidity

During the SNB’s General Assembly meeting on Friday, President Martin Schlegel expressed significant reservations about Bitcoin’s suitability for national reserves, focusing primarily on market stability concerns.

“For cryptocurrencies, market liquidity, even if it may seem ok at times, is especially during crises naturally called into question,” Schlegel stated. “Cryptocurrencies also are known for their high volatility, which is a risk for long-term value preservation. In short, one can say that cryptocurrencies for the moment do not fulfill the high requirements for our currency reserves.”

Advocates Present Compelling Data Supporting Bitcoin Allocation

The rejection comes despite research from the Bitcoin Initiative, a cryptocurrency advocacy group, which demonstrated that even a modest 1% Bitcoin allocation since 2015 would have nearly doubled the returns of the SNB’s portfolio while only marginally increasing volatility.

The SNB’s current portfolio has grown approximately 10% since 2015, but simulations suggest that with a small Bitcoin allocation, these returns could have been substantially higher, according to the advocacy group’s analysis.

Bitcoin’s Portfolio Effects vs. Individual Asset Performance

Luzius Meisser, a member of the Bitcoin Initiative and board member of Bitcoin Suisse, emphasized that Bitcoin’s contribution to a portfolio should be evaluated comprehensively rather than in isolation:

“[Bitcoin] price reached new highs, it showed resilience under market stress, and it continues to be highly liquid with trading volumes in the double-digit billions, every day and night, even on bank holidays,” Meisser said. “The Bitcoin network remains one of the most reliable and secure IT systems ever created. And most remarkably, the United States has started a strategic bitcoin stockpile.”

Potential Political Motivations Behind Rejection

The Bitcoin Initiative suggested in a statement that the SNB’s reluctance might stem from political considerations rather than purely financial ones. Adding Bitcoin to national reserves could potentially be interpreted as “an expression of distrust towards other currencies,” potentially complicating Switzerland’s already delicate relationship with the European Union.

European Central Bank’s Opposition to Crypto Reserves

The SNB’s position aligns with that of European Central Bank President Christine Lagarde, who has consistently criticized Bitcoin, describing it as “worth nothing” and a “highly speculative asset” with connections to money laundering activities.

In January, Lagarde confidently stated that Bitcoin would not enter the reserves of any central banks within the ECB’s General Council. This statement came in response to the Czech National Bank Governor considering adding Bitcoin to their national reserves.

Indirect Crypto Exposure Through Corporate Holdings

Despite rejecting direct Bitcoin holdings, the SNB maintains indirect exposure to cryptocurrency markets through its investments in U.S. companies with Bitcoin on their balance sheets, including Strategy, Tesla, and MARA Holdings.

Future Outlook for Crypto in Central Banking

As cryptocurrency adoption continues to grow globally, the question of whether major central banks will eventually incorporate digital assets into their reserves remains open. The SNB’s decision highlights the ongoing tension between traditional financial institutions and the emerging crypto economy, even as Bitcoin continues to mature as an asset class.

Disclaimer: This article is provided for informational purposes only and does not constitute financial advice. The cryptocurrency market involves substantial risk and volatility. Before making any investment decisions regarding Bitcoin or other digital assets, consult with a qualified financial advisor who understands your personal circumstances and investment goals. Past performance is not indicative of future results, and you should never invest funds that you cannot afford to lose. The information presented here should not be the sole basis for any investment decisions.