A recent proposal within the Polkadot ecosystem is advocating for the establishment of a Strategic Bitcoin Reserve. The plan involves converting 500,000 DOT, worth approximately $2 million, into Threshold Bitcoin (tBTC), a wrapped version of Bitcoin secured through threshold cryptography to ensure decentralization and non-custodial management.
Initially, the 500,000 DOT will be staked in aDOT, a yield-generating collateral token, allowing the treasury to earn returns on its holdings while increasing liquidity for DeFi borrowing. A portion of 1,000 DOT will be allocated to cover transaction fees associated with implementing this strategy.
The conversion of DOT to BTC will be carried out gradually over a year, utilizing Hydration’s rolling dollar-cost averaging (DCA) feature for daily, incremental purchases to maintain a steady Bitcoin inflow. Once enough tBTC is accumulated, small portions of it will be added as liquidity to the Hydration Omnipool, with the intention of diversifying into Bitcoin while preserving it as a reserve asset.
Advocates of the proposal believe that this move will help mitigate market fluctuations, create new opportunities for DeFi on Polkadot, safeguard the treasury’s value, and ensure ample funds for future budgets. This strategic move aligns with the broader trend of organizations and governments viewing Bitcoin as a valuable reserve asset to hedge against economic uncertainties and currency devaluation.
In parallel to these developments, Polkadot’s native token, DOT, has been facing challenges in the market. The token’s price has recently dropped by 7% to $3.80, marking its lowest level since October 2023. In Bitcoin terms, DOT has reached an all-time low of 0.00003658 BTC, reflecting a decline of over 62% in the past year.
As of the latest data at 5:42 pm UTC on June 13, 2025, Polkadot is ranked #22 by market cap, with a market capitalization of $6.08 billion and a 24-hour trading volume of $349.58 million. The total crypto market is valued at $3.29 trillion, with a 24-hour volume of $176.63 billion and Bitcoin dominance standing at 63.89%.
The push for a Strategic Bitcoin Reserve within the Polkadot ecosystem comes at a critical time for the project, as it navigates market challenges and explores new avenues for growth and stability in the evolving crypto landscape.