Should cryptocurrencies be included in the portfolio of international reserves held by central banks?

Figures & data

Figure 1. Price of Bitcoin (US$).

Figure 2. Representative model of Monte Carlo experiment.

Figure 3. Counterfactual simulations with various portfolio holdings of Bitcoin.

Table 1. Holdings of Foreign currency and balances for portfolio of Bitcoin $BDS (beginning of the period with a Bitcoin Portfolio of 0.01%)

Horizon	Minimum	Maximum	Mean	Standard deviation	Portfolio gain	Portfolio losses exceed initial investment
1	0.020	2,138.051	82.493	132.209	55,000.000	0.000
2	−0.125	43,672.828	351.432	1,353.700	114,993.000	7.000
5	−0.096	54709611.782	52,574.323	1014076.792	294,986.000	14.000
10	−2,374.090	334392942429.886	224352269.437	5997420787.878	629,953.000	47.000

Source: Authors’ calculations.

Figure 4. Forecasted foreign exchange balances with 0.01% Bitcoin portfolio.

Figure 5. Forecasted coefficient of variation of foreign exchange balances with 0.01% Bitcoin portfolio.

Figure 6. Forecasted reserves and coefficient of variation of foreign exchange balances with 0.01% sterling portfolio.