Polkadot [DOT] is weighing a significant treasury shift with a proposal to convert 500,000 DOT tokens—worth approximately $1.9 million—into Threshold Bitcoin (tBTC), a Bitcoin-backed ERC-20 token. The move aims to diversify the network’s financial reserves and reduce exposure to native token volatility using a year-long dollar-cost averaging (DCA) strategy.
Introduced by a community member under the pseudonym “hippiestank,” the initiative is part of a broader effort to create a Bitcoin Reserve for the Polkadot Treasury. If approved, the plan would be executed through Hydration’s “rolling DCA” approach, gradually acquiring BTC exposure via tBTC without making a lump-sum purchase.
Supporters Say It’s About Risk Management, Not Timing
With DOT down nearly 60% year-to-date, proponents argue that holding BTC could bring greater financial resilience to Polkadot’s ecosystem. While critics worry about the timing—given Bitcoin is trading near its all-time high—supporters counter that diversification shouldn’t be held hostage to market speculation.
One advocate in the community stated, “This proposal is about risk management and operational continuity, not market timing or speculation.” The proposal’s creator also emphasized that waiting for the “perfect moment” could jeopardize Polkadot’s strategic planning and leave its treasury overly dependent on one volatile asset.
Critics Urge Broader Diversification Strategy
Despite the support, the proposal has not received unanimous approval. Detractors argue that swapping DOT for BTC—another volatile asset—may not meaningfully mitigate risk. “If we want a resilient Treasury, we would diversify into different asset classes,” one community member wrote.
The debate underscores a larger tension within Polkadot’s governance: balancing innovation and risk amid broader market uncertainty. As DOT trades at $3.82 after a 6.10% drop in 24 hours (per CoinMarketCap), the decision could have lasting implications for treasury policy.
Also Read: Polkadot and Hedera ETFs Face SEC Delay as Analysts Predict Approval in Late 2025
As the community deliberates, Polkadot’s bold diversification proposal could set a precedent for how blockchain networks manage treasury assets in a volatile crypto market. Whether it passes or not, the move signals a growing interest in cross-chain financial resilience.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of CoinBrief.io. Before making any investment decisions, you should always conduct your own research. Coin Brief is not responsible for any financial losses.
