- Cardano founder Charles Hoskinson faced backlash after proposing to convert $100 million of ADA treasury funds into Bitcoin and stablecoins to generate returns and support the ecosystem.
- Critics, including investor Anthony Pompliano, argue this move signals a lack of confidence in ADA’s long-term value and undermines Cardano’s native token.
Charles Hoskinson, founder of the Cardano blockchain platform, is facing significant criticism after unveiling a controversial plan to convert a portion of Cardano’s treasury assets from ADA, the native cryptocurrency, into Bitcoin and stablecoins.
Hoskinson initially announced a strategy to swap $100 million worth of ADA held in Cardano’s treasury into USDM stablecoins and Bitcoin. The rationale behind this move, according to Hoskinson, was to generate a steady annual return estimated between 5% and 10%. He argued that the yield from this strategy could then be used to repurchase ADA, effectively replenishing the treasury and supporting the long-term health of the ecosystem’s decentralized finance (DeFi) and stablecoin sectors.
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At present, the Cardano treasury reportedly holds about 1.7 billion ADA tokens. Hoskinson suggested that if the initial conversion proves profitable, the ecosystem team might continue this approach on an annual basis, potentially expanding Bitcoin and stablecoin holdings to $1 billion each. This, he believes, would strengthen Cardano’s financial foundation, providing “great returns and a pretty stable floor for the ecosystem,” as stated in a now-viral video addressing the community.
However, the announcement has sparked a wave of criticism from within the crypto space. Some Cardano supporters view the plan as a pragmatic step toward financial stability, but many others see it as a troubling sign. Critics argue that converting ADA into Bitcoin undermines confidence in Cardano’s own token and signals a lack of faith in its long-term performance.
Prominent crypto investor Anthony Pompliano was among the harshest critics, interpreting Hoskinson’s move as an implicit admission that ADA “cannot hold water” or outperform Bitcoin over time. Pompliano contended that this approach suggests the only viable way to create lasting economic value is by selling ADA from the treasury to acquire Bitcoin — effectively betting against Cardano’s own currency.
The debate highlights a broader tension in the cryptocurrency world between holding native tokens and diversifying into more established digital assets like Bitcoin. For Cardano, a project that has long prided itself on innovation and independence, Hoskinson’s plan marks a significant pivot — one that has unsettled parts of its community and reignited discussions about the platform’s future direction and financial strategy.
As the Cardano ecosystem weighs the potential benefits against the backlash, it remains to be seen whether Hoskinson’s plan will proceed and how it might impact the platform’s position in the increasingly competitive crypto landscape.