Polkadot, a leading blockchain platform, is taking a bold step to stabilize its treasury by proposing the conversion of 500,000 DOT tokens—valued at approximately $2 million—into Bitcoin. This move comes as DOT, Polkadot’s native token, faces significant price pressure, having dropped over 60% in 2025 and recently hitting its lowest level since October 2023 .
A Strategic Shift: Why Bitcoin?
The core idea behind the proposal is to diversify Polkadot’s treasury and reduce its exposure to the volatility of a single asset. By gradually converting DOT into Threshold Bitcoin (tBTC)—a decentralized, non-custodial, wrapped version of Bitcoin—Polkadot aims to hedge against further downturns and preserve the value of its treasury . This approach mirrors a growing trend among both corporations and governments, who increasingly view Bitcoin as a strategic reserve asset.
How the Reserve Will Work
• The plan starts by staking the 500,000 DOT in a yield-generating token (aDOT), allowing the treasury to earn returns while preparing for the conversion.
• Using Hydration’s automated dollar-cost averaging (DCA) system, the DOT will be converted into tBTC incrementally over the course of a year. This method helps smooth out price fluctuations and avoids large, market-moving trades .
• Small portions of the acquired tBTC (0.005 tBTC per transaction) will be added to the Hydration Omnipool, boosting on-chain liquidity and supporting Polkadot’s DeFi ecosystem .
• The tBTC will remain under treasury control, serving as a reserve rather than a payment pool.
Community Reaction and Broader Context
The proposal has sparked debate within the Polkadot community. Supporters argue that diversifying into Bitcoin is a prudent risk management strategy, especially as DOT’s value has struggled. They point to Bitcoin’s strong performance over the past decade and its growing role as a hedge against economic uncertainty . Critics, however, question whether the move is timely or if it exposes the treasury to new risks.
This initiative is part of a broader industry trend, with blockchain projects, corporations, and even governments exploring Bitcoin reserves as a way to strengthen financial resilience. For Polkadot, the goal is clear: create a more robust treasury capable of supporting ecosystem development through all market cycles .
Polkadot’s Market Snapshot
• DOT price: $3.80 (down 7% in the last 24 hours)
• Market cap: $6.08 billion
• 24-hour trading volume: $349.58 million
As the proposal moves through community discussions, its outcome could set a precedent for how blockchain treasuries manage risk and seek stability in an unpredictable crypto landscape.
