Polkadot’s $50 Million Bitcoin Reserve Strategy: Community Divided on 500K DOT Dollar-Cost Averaging Proposal—Protection or Hazard?

A recent initiative to convert 500,000 DOT, valued at approximately $50 million, into Bitcoin has ignited discussions within the Polkadot community.

The proposal, put forth by a community member identified as hippiestank, aims to diversify the Polkadot treasury and enhance its long-term financial resilience by establishing a strategic Bitcoin reserve.

Community Divided Over Proposal to Convert 500K DOT Into Bitcoin for Strategic Hedge

Launched in early June, the initiative recommends employing a dollar-cost averaging (DCA) strategy to gradually acquire Threshold Bitcoin (tBTC) over a one-year period.

The proposal suggests that BTC could serve as a safeguard during market declines while increasing on-chain liquidity and enhancing incentives for Polkadot’s DeFi ecosystem. However, not all members are persuaded.

POLKADOT COMMUNITY EYES BITCOIN RESERVE USING 501,000 DOT
– The Polkadot community has proposed the creation of a Bitcoin reserve utilizing 501,000 $DOT.
Key Details:
– The initiative plans to convert 500,000 DOT into tBTC, a Bitcoin-backed token on Ethereum, using Hydration’s… pic.twitter.com/YXSQVhc9fE

— BSCN (@BSCNews) June 13, 2025

The plan would utilize Hydration’s automated system to execute the conversions. It entails replenishing a proxy account that feeds into a continuous DCA schedule.

A minor amount, 0.005 tBTC, would also be contributed to the Hydration Omnipool, facilitating liquidity provisioning via Threshold Network’s decentralized bridge.

The anticipated rate estimates 1 DOT at approximately 0.000041 tBTC.

The concept has polarized the Polkadot community. Proponents regard Bitcoin as a hedge against market volatility and a means to safeguard value.

“This proposal is about risk management and operational continuity, not market timing or speculation,” the proposer stated in the forum discussion.

They contended that postponing for optimal market conditions would render diversification unfeasible and leave the treasury vulnerable.

Conversely, critics question the timing of the proposal. DOT is currently trading near its yearly lows, while Bitcoin remains stable above $100,000.

One community member remarked, “I just don’t see how we can do this and for it to really provide any value, short or long term… it’s likely to do more harm than good with the additional downward pressure that we’re already contending with.”

Despite these apprehensions, the proposal maintains that the initiative is not about market timing but rather about securing the network’s future.

“I believe the ‘DOT ATL, BTC ATH’ argument misframes the situation. This proposal is about risk management and operational continuity, not market timing or speculation,” the proposer noted.

Others raised concerns regarding transparency and community engagement.

One participant suggested that the proposal should be presented to a wider audience on X (formerly Twitter) prior to moving forward.

This concern highlights a deeper tension within the ecosystem regarding the extent of authority that should be granted to a smaller group of forum contributors versus broader community involvement.

Discussions are still in progress, but the proposal’s author indicates that the vote could proceed on-chain as early as next week, contingent on feedback.

If approved, Polkadot would join a select group of blockchain ecosystems experimenting with a Bitcoin-backed treasury, a concept that could set a precedent across the industry.

Whether the proposal serves as a protective measure or a risk remains a contentious topic. For the moment, the decision lies with the community.

Corporate Bitcoin Reserves Surge as Polkadot Joins Institutional Trend

Polkadot’s $50 million Bitcoin reserve initiative is part of a larger trend, as an increasing number of companies view Bitcoin as a strategic treasury asset.

Just yesterday, Nasdaq-listed fintech company Mercurity announced intentions to raise $800 million to create a long-term Bitcoin reserve.

Mercurity Fintech Holding, a digital finance firm listed on Nasdaq, has revealed plans to raise $800 million to establish a Bitcoin reserve. #Bitcoin #Mercurityhttps://t.co/wW04xWFkRx

— Cryptonews.com (@cryptonews) June 12, 2025

The firm aims to incorporate BTC into its blockchain-native reserve framework through custody, staking, and tokenized treasury management solutions.

If successful, Mercurity’s reserve would position it among the world’s leading corporate Bitcoin holders—just ahead of GameStop, according to data from Bitbo.

This trend signifies a notable increase in institutional adoption.

As of June 2025, at least 223 public companies now possess Bitcoin on their balance sheets, up from 124 a year prior.

Collectively, these entities hold over 819,000 BTC, or approximately 3.9% of Bitcoin’s total supply, based on data from BitcoinTreasuries.net.

Meanwhile, Polkadot is also reinforcing its commitment to crypto-native tools.

A community-approved launch of a non-custodial, Visa-compatible Polkadot payment card indicates broader aspirations in crypto-finance, with Bitcoin now central to that strategy.

From fintech companies to blockchain ecosystems, corporate Bitcoin adoption is increasingly becoming a standard practice.

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