Please note that this article is not financial advice. Investing in cryptocurrencies carries significant risks. You may lose (part of) your investment. Therefore, be well informed before making investment decisions. I am not giving advice to buy or invest in crypto.
Around the world, it is no longer just publicly traded companies that are adding Bitcoin to their balance sheets. Since 2023, international companies have announced Bitcoin purchases, after which their share price skyrocketed. Now large blockchain projects like Cardano (ADA) and Polka Dot (DOT) in their footsteps. Both networks are announcing plans to include Bitcoin in their "treasury," raising the question: can crypto currencies benefit from a Bitcoin treasury as much as publicly traded companies?
Why companies are buying Bitcoin
The logic behind this trend is simple: putting Bitcoin on the balance sheet increases a company's assumed future value, provided Bitcoin continues its historical upward trend. Bitcoin's average annual returns over the past decade have been around 50%. Investors anticipate this and immediately price this expected growth into companies that add BTC to their cash positions. That explains why stocks like MicroStrategy's rise so hard after every BTC purchase announcement: people see them as a kind of "supercharged ETF," with operating income as an additional driver to buy more Bitcoin.
And so now crypto projects
Cardano and Polkadot are now also choosing to go this route, though in their own ways. In June, Charles Hoskinson, founder of Cardano, announced he was working on a decentralized sovereign investment fund dat deels in Bitcoin zal beleggen. Cardano’s schatkist bevat momenteel bijna 1,8 miljard ADA, met een waarde van ongeveer $1 miljard. Van dat bedrag zou zo’n $100 miljoen ingezet kunnen worden voor investeringen in stablecoins en een bescheiden Bitcoin-positie. Polkadot volgt een soortgelijk pad. De community bespreekt een voorstel om $2 miljoen aan DOT geleidelijk om te zetten in wrapped Bitcoin (TBTC). Hiermee wil men de waarde van de DOT-token beschermen ten opzichte van Bitcoin, en tegelijkertijd liquiditeit creëren voor DeFi-protocollen op het Polkadot-netwerk.
Differences with companies
Yet there is a fundamental difference. Whereas companies often issue equity or debt to purchase Bitcoin, Cardano and Polkadot want to use their own tokens with all the market risks involved. Selling large amounts of ADA or DOT could depress the price. To avoid that, they opt for gradual sales and alternative strategies such as using ADA as collateral in DeFi protocols. More importantly, companies have operational cash flows. Blockchain projects, on the other hand, rely largely on their community, grants or token sales. As a result, their ability to continuously purchase BTC is more limited unless their network productivity increases substantially.
What does this mean for investors?
In the short term, I think news of BTC purchases by Cardano and Polkadot will cause their tokens to rise in price. In the longer term, however, the question is whether these strategies add structural value. Unlike corporations, these projects do not want to use their Bitcoin holdings as profit generators, but as system amplifier: a source of stability, liquidity and independence within their own ecosystem.
The announcements by Cardano and Polkadot mark an important shift, by the looks of it, crypto projects will now also seek stability and trust in the world's oldest digital currency. Yet they will have to take different paths than companies to take advantage of this. Without constant cash flow and with a heavily technology-focused community, they are more likely to use Bitcoin as a system component rather than a profit center. Whether that turns out to be a successful strategy? That will depend on transparency, community support, and, above all, well-thought-out financial policies.
