Cardano founder Charles Hoskinson is plotting a dramatic shift for the blockchain’s massive $1.2 billion treasury, proposing to convert up to $100 million worth of ADA tokens into Bitcoin and stablecoins.
This strategic pivot represents more than simple diversification – it’s a calculated gamble designed to supercharge Cardano’s DeFi ecosystem and potentially trigger a significant ADA price surge.
The proposal centers on transforming 5-10% of Cardano’s treasury into a sophisticated “sovereign wealth fund” comprising Bitcoin and Cardano-native stablecoins like USDM and USDA. Hoskinson envisions this treasury conversion as a self-reinforcing mechanism that could fundamentally alter Cardano’s competitive position in the cryptocurrency landscape.
“We can create a yield by converting 5% to 10% of the treasury into stable assets like Bitcoin,” Hoskinson explained during a recent podcast. “And that yield on an annual basis can be used to purchase ADA over time to replenish the treasury.”
🚨Cardano is planning to buy Bitcoin with its $1.2B treasury!
Hoskinson proposes converting some ADA in the #Cardano treasury into BTC and stablecoins——and use yield to buy back $ADA.💰
This could be crypto’s FIRST real sovereign wealth fund🔥 pic.twitter.com/cXJ0iaOURr
— Coin Bureau (@coinbureau) June 15, 2025
This innovative approach would essentially create a perpetual buying pressure for ADA tokens, using the yields generated from Bitcoin and stablecoin holdings to continuously repurchase ADA from the open market.
The financial mechanics are compelling. Hoskinson estimates this strategy could generate $5-10 million worth of ADA annually, creating a systematic buyback program that would theoretically support token prices while growing the treasury’s overall value.
If successful, he envisions scaling this approach over the next decade, potentially building a billion-dollar Bitcoin and stablecoin reserve that would establish Cardano among the crypto industry’s most well-capitalized ecosystems.
DeFi Arms Race
Cardano’s Bitcoin strategy reflects deeper competitive pressures within the blockchain ecosystem. Hoskinson has openly acknowledged that Ethereum and Solana currently dominate in crucial metrics like stablecoin-to-total-value-locked (TVL) ratios, giving them significant advantages in attracting DeFi users and liquidity providers.
By injecting substantial Bitcoin and stablecoin holdings into its ecosystem, Cardano aims to dramatically increase its on-chain liquidity and provide more attractive yields for DeFi participants. This could help bridge the gap with more established DeFi platforms and potentially attract institutional investors who view Bitcoin exposure as essential for cryptocurrency portfolios.
Cardano And Bitcoin Implications
The timing appears strategic, as Bitcoin continues proving its resilience as a store of value while traditional crypto projects seek ways to diversify their treasuries beyond their native tokens. Cardano’s proposal positions the network to benefit from Bitcoin’s potential appreciation while using those gains to strengthen its own ecosystem fundamentals.
For Cardano, this represents a critical juncture where theoretical blockchain capabilities must translate into measurable DeFi adoption and user growth. Success could establish Cardano as a formidable competitor to Ethereum and Solana, while failure might highlight the challenges of late-stage DeFi ecosystem development in an increasingly competitive market.