3 Reasons Cardano's New Bitcoin Treasury Plan May Backfire

Cardano (CRYPTO: ADA) founder Charles Hoskinson wants to convert roughly $100 million of the cryptocurrency, or about 5% to 10% of the chain's treasury of 1.7 billion tokens, into Bitcoin (CRYPTO: BTC), plus a basket of Cardano-native stablecoins. The objective would be to shore up the chain's liquidity for its decentralized finance (DeFi) applications, and prove that Cardano can compete with its faster-growing rivals.The proposal sounds bold, but so far investors seem to be judging the move as bearish; the coin slid 6% on the news, capping off its fall of 35% this year so far. Here's why the market's skepticism is warranted, and why the plan could end up hurting the chain rather than helping it.Crypto treasuries exist to fund future development and buffer shocks. It's normal for chains to retain some coins that are issued by their competitors, and it's also normal for chains to retain some Bitcoin. In fact, it's necessary for DeFi projects to be able to access on-chain liquidity denominated in external tokens.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool