Polkadot Proposes Using DOT Tokens to Create Bitcoin Strategic Reserve, Faces Mixed Reactions

By [Your Name/Author] | June 27, 2025

Members of the Polkadot community are divided on a governance proposal to strategically allocate DOT tokens into Bitcoin (BTC) via the Threshold BTC (tBTC) protocol. The measure, initiated by pseudonymous user hippiestank, involves converting 500,000 DOT tokens using a dollar-cost averaging (DCA) strategy if consensus is reached.

Proposal Goals and Rationale

The June 2 initiative aims to create a potential initial Bitcoin strategic reserve to enhance diversification and support long-term operational stability. Proponents argue this is risk management, not speculation, seeking to mitigate vulnerabilities independent of BTC’s current high price levels.

“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.”

– Proposal author, pseudonymous hippiestank

The proposal acknowledges DOT’s underperformance in 2025 and suggests a diversified portfolio is crucial for sustainability amid ongoing cryptocurrency market turbulence.

Threshold BTC (tBTC)

Should the proposal succeed, the Polkadot ecosystem could utilize tBTC. This non-custodial solution employs threshold-Elliptic Curve Digital Signature Algorithm (ECDSA) wallets, designed to maintain the network’s decentralization, transparency, and liquidity requirements.

Mixed Community Response

Reactions among Polkadot community members are mixed. Supporters view a Bitcoin reserve as a hedge against potential future market uncertainties, accepting the DCA strategy as a calculated step. Critics, however, question the timing, noting DOT’s recent low prices contrast significantly with BTC’s all-time high levels.

One community member highlighted concerns:

“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.”

– Anonymous Polkadot community member

The skeptical member also called for broader public consultation before a final decision.

Next Steps

The Polkadot community will need to reach consensus and vote on the proposal for it to proceed. The outcome signifies another evolving strategy for the blockchain network, potentially testing the effectiveness of diversification tactics during periods of market disparity.

Prior discussions include approval for a Polkadot-branded non-custodial Visa-compatible payment card.