Downturn – Earlybirds Invest

Polkadot’s Bitcoin proposal

Before conversion to Bitcoin begins, the 500,000 DOT will first be staked in aDOT, a yield-generating collateral token.

This will allow the treasury to earn returns on its DOT holdings while increasing liquidity for DeFi borrowing.

Additionally, 1,000 DOT will be set aside to cover transaction fees involved in executing this strategy.

From there, the Polkadot treasury would execute the BTC conversion gradually over a year, using Hydration’s rolling dollar-cost averaging (DCA) feature. This method enables daily, incremental purchases to maintain a steady Bitcoin inflow.

Once enough tBTC is accumulated, portions of it (0.005 tBTC per transaction) would be added as liquidity to the Hydration Omnipool. The proposal stated:

“This is intended as a first step towards diversification into Bitcoin where future proposals could include other bridged BTC assets. The tBTC stays under the control of the Treasury and is intended to be maintained as a reserve, not a pool for payments.”

Supporters of the plan say the move would reduce exposure to market swings and create new opportunities for DeFi on Polkadot. The reserve is also designed to preserve the treasury’s value and ensure sufficient funds for future budgets.

Meanwhile, Polkadot’s move mirrors a broader industry shift of organizations and governments viewing Bitcoin as a strategic reserve asset to hedge against economic instability and currency devaluation.

Data compiled by Hodl15Capital shows that the top 100 corporate holders of the top crypto hold more than 818,000 Bitcoin in their coffers.

DOT’s price struggles

Polkadot’s interest in building a Bitcoin reserve comes as its DOT token faces market challenges.

According to CryptoSlate’s data, DOT’s price has dropped 7% in the last 24 hours to $3.80, its lowest level since October 2023.

In Bitcoin terms, the token has fallen to an all-time low of 0.00003658 BTC, losing over 62% of its value in the past year.

Polkadot Market Data

At the time of press 5:42 pm UTC on Jun. 13, 2025, Polkadot is ranked #22 by market cap and the price is down 5.61% over the past 24 hours. Polkadot has a market capitalization of $6.08 billion with a 24-hour trading volume of $349.58 million. Learn more about Polkadot ›

Crypto Market Summary

At the time of press 5:42 pm UTC on Jun. 13, 2025, the total crypto market is valued at at $3.29 trillion with a 24-hour volume of $176.63 billion. Bitcoin dominance is currently at 63.89%. Learn more about the crypto market ›

Disclaimer: CryptoSlate has received a grant from the Polkadot Foundation to produce content about the Polkadot ecosystem. While the Foundation supports our coverage, we maintain full editorial independence and control over the content we publish.

Mentioned in this article

Strategy, previously known as MicroStrategy, has revealed close to $6 billion in unrealized losses on its Bitcoin investment during the first quarter of 2025, according to an April 7 filing with the US Securities and Exchange Commission (SEC).

Between January and March 2025, the firm acquired 80,715 BTC for $7.66 billion, or an average cost of $94,922 per coin.

Strategy's Bitcoin Holdings — Strategy’s Q1 Bitcoin Purchases (Source: SEC Filing)

However, due to a sharp 11.8% downturn in Bitcoin’s price during the quarter, the worst since 2018, the assets lost significant value, resulting in a $5.91 billion paper loss.

Despite the unrealized losses, the company expects a partial offset from a $1.69 billion income tax benefit.

To fund these purchases, Strategy relied on several capital-raising initiatives. The firm generated $4.37 billion from its at-the-market Class A common stock sale. Another $1.99 billion came from the issuance of 2030B Convertible Notes.

Strategy's Bitcoin Purchases in Q1 — Strategy’s Bitcoin Purchases in Q1 (Source: Bitcoin Treasuries)

The company also raised $593.7 million through Perpetual Strike Preferred Stock, using public and at-the-market offerings. An additional $710 million was secured through the initial sale of Perpetual Strife Preferred Stock.

Strategy pulled in $7.69 billion during the quarter to support its Bitcoin buying spree.

As of March 31, the firm holds 528,185 BTC, which were acquired for roughly $36 billion, or an average acquisition price of $67,458 per coin. At current market prices, the value of its Bitcoin holdings exceeds $43 billion.