Polkadot to create Bitcoin reserve
Polkadot explores converting 500,000 DOT into tBTC for BTC reserve
Polkadot is evaluating a new proposal to convert 500,000 DOT tokens into tBTC, an Ethereum-based wrapped Bitcoin asset, as part of an initiative to create a decentralized Bitcoin reserve.
The mechanism would be powered by Hydration’s “rolling DCA” protocol, which allows for recurring, automated conversions of DOT into tBTC through a proxy account setup, reports CoinGape.
This approach differs from traditional dollar-cost averaging by enabling dynamic and continuous accumulation over time. A small contribution of 0.005 tBTC would also be allocated to the Hydration Omnipool via Threshold Network’s non-custodial BTC bridge. The proposal is still in the discussion phase and has not yet been submitted for an official vote.
SEC delay and DeFi liquidity drive Polkadot’s BTC strategy
The proposal coincides with the U.S. SEC’s delay in approving a spot Polkadot ETF, prompting the ecosystem to seek other means of boosting relevance and liquidity. If implemented, the BTC reserve could offer Polkadot’s Treasury a new layer of diversification and risk management, supporting the broader decentralized finance (DeFi) ambitions of the network. Advocates suggest that holding a Bitcoin reserve may help attract capital and stabilize DOT’s utility within the ecosystem.
At current conversion rates, 1 DOT would yield approximately 0.000041 tBTC, with the initiative intended to be executed gradually over the next year to reduce market disruption and hedge against volatility.
Community debates timing, impact, and financial rationale
The Polkadot community remains split on the value of the proposal. Supporters argue that building a BTC reserve enhances “operational continuity” and resilience, especially as DOT’s price has dropped over 60% in 2025. They assert that waiting for an ideal entry into BTC is unrealistic and that action must be taken to strengthen the treasury.
Critics, however, question whether the plan offers meaningful short- or long-term benefits, citing the speculative nature of crypto diversification during a bear cycle. Meanwhile, Polkadot is also working on a novel utility case for its token: the launch of the first DOT debit card, in collaboration with Nova Wallet, to expand token use beyond DeFi and into daily consumer transactions.
Recently we wrote that Singapore-based Trident Digital Tech Holdings Ltd. has unveiled plans to raise $500 million to build one of the world’s largest corporate XRP treasuries.
