Polkadot’s community is split over a proposal to convert 500,000 DOT tokens into tBTC using a year-long DCA strategy amid market volatility.
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A Polkadot governance proposal to convert 500,000 DOT tokens to Threshold Bitcoin (tBTC) for diversification and long-term stability has received mixed reactions from community members.
While some see Bitcoin (BTC) as a hedge against market uncertainty, others remain skeptical about the timing amid all-time high BTC prices.
In early June, pseudonymous Polkadot community member hippiestank proposed the creation of an initial Bitcoin strategic reserve over the course of one year. Upon consensus from the community, the proposal would sell 500,000 Polkadot (DOT) tokens and reinvest them into BTC using a dollar-cost averaging (DCA) strategy.
Threshold BTC (tBTC) is a non-custodial solution utilizing threshold-Elliptic Curve Digital Signature Algorithm (ECDSA) wallets, which Polkadot could use for maintaining its decentralization, liquidity and transparency.
Planning ahead for market uncertainties
In the forum discussion, while acknowledging DOT’s poor price performance in 2025, several Polkadot community members said a Bitcoin reserve could help cushion the ongoing free-fall.
Some questioned the proposal’s timing, considering that DOT is trading at one of its lowest prices, while Bitcoin stands strong above $100,000. The proposal argued:
“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 further warned that Polkadot would never be able to diversify if members insist on waiting for perfect timing. Additionally, the community showed interest in diversifying into different asset classes and not solely relying on Bitcoin.
Weighing the benefits of Bitcoin strategic reserve
Skeptics demanded further clarification.
“I just don’t see how we can do this and for it to really provide any value, short or long term,” one community member said. “Even with amazing yields, it’s likely to do more harm than good with the additional downward pressure that we’re already contending with from other DCAs mixed with a lack of interest.”
The member also urged the proposer to involve a wider group of members on X before coming to a final decision:
While discussions are underway, the Polkadot community will ultimately have to vote and finalize any creation of diversified strategic reserves.
The community recently gave the nod to the launch of a Polkadot-branded non-custodial payment card, which is usable on services accepting Visa.
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