The "scar" of the DAT industry: Why does high growth conceal greater risks?

The recent Digital Asset Treasury (DAT) sector has experienced rollercoaster-like fluctuations. This is not an isolated event but a concentrated exposure of the entire industry’s structural issues. It took only three months to go from boom to disappointment. What exactly is the reason behind this nimaga?

From “Gold Rush” to “De-Inflation”: The Deceleration of Digital Asset Funds

Since the beginning of 2025, the DAT industry has seen explosive growth. According to CoinGecko data:

• The number of DAT companies surged from 4 in 2020 to 142 in 2025
• Only in 2025, 76 new companies were added, setting a record
• The majority of BTC holders are among these 142 companies, with only 15 ETH holders and 10 SOL holders

Behind this seemingly prosperous scene lies a dangerous fact: the value of most DATs is entirely tied to coin prices.

When Bitcoin retraced from its high, the total market cap of the DAT sector fell from $176 billion to $77 billion, a decline of over 56%. Worse still, some companies’ stock prices performed far worse—some cases saw an 80% drop from their highs, far exceeding Bitcoin’s own volatility.

Why Is There a “False Sense of Security” in DAT Valuations?

mNAV (market NAV) is the most commonly used metric to evaluate DATs—i.e., the book value of held assets divided by the number of shares. It sounds reasonable, but this metric itself is a trap:

Book value ≠ Realizable value

Several institutions have pointed out issues including:

• Liquidity Illusion: Although holding large assets, they may not be sold at book value under extreme market conditions, especially for DATs holding altcoins
• Debt Ignored: Many DATs rely on convertible bonds and PIPE financing, meaning the “free assets” on the books are actually diluted
• Operational Losses Erode: DATs without actual business income see daily operational costs consuming their inventories; a pretty book is just a mirage
• Time Cost: Management fees and risks grow exponentially over time, not linearly

Conclusion: mNAV is just the starting point, not the end. True risk assessment must include debt structure, management capability, and market liquidity.

Industry “Washes Out the Chaff”

The days when all DATs rose and fell together are over. Now, the market begins to differentiate:

Companies capable of sustained financing (such as leading firms like Strategy) choose to continue buying during downturns, increasing inventories to maintain their “growth story.” This requires strong financing channels and investor confidence.

Mid-sized DATs with technological advantages are shifting towards operational models—some are separating computing power or node services from their inventories, attempting to evolve from “pure asset holding” to “asset + revenue” models. This reduces dependence on coin prices.

Small and medium DATs are in trouble—they cannot sustain financing to buy more assets nor have the technical foundation for transformation. They are forced to sell some assets to pay debts or maintain operations.

Regulatory Tightening Is Changing the Game

This year, the US SEC has scrutinized several DAT companies, requiring more detailed disclosures about asset valuation methods, convertible bond structures, and independent audit procedures.

While this transparency requirement temporarily increases corporate costs, it may serve as a “filter” in the long run—only truly sound companies will continue to pass scrutiny, while loosely operated firms will be gradually eliminated.

How Can DATs “Survive”? Three Strategies

Currently, DAT companies are adopting three different survival strategies:

Path 1: Aggressive Expansion
Continuous financing and buying, betting on coin prices to keep rising. This requires unlimited financing ability and investor confidence—obviously not feasible for everyone.

Path 2: Business Transformation
Reducing reliance on pure assets, increasing operational income. Shifting towards AI, node services, custody, and other new businesses to mitigate the impact of coin price volatility. This path requires time and technological accumulation.

Path 3: Survival Mode
Maintaining the status quo, periodically selling some assets to sustain operations, waiting for market rebound. This is the most conservative but also the most passive approach.

Key Takeaway: Why the Future of DAT Depends on Things Beyond Coin Prices

Investors need to shift their evaluation mindset for DATs:

• Not just how many assets are in the trezor, but how much can actually be realized
• Not just book value growth, but operational cash flow and debt pressure
• Not just size rankings, but the quality of management decisions

Ultimately, DATs that survive the next cycle must meet criteria such as: high liquidity asset allocation, stable financing channels, gradually established revenue streams, transparent information disclosure, and strong risk management.

The era of simply holding coins and waiting for prices to rise is over. The DAT industry is transitioning from “wild growth” to a “survival of the fittest” phase. Those that can answer the question “Why are you more valuable than just holding coins?” are the true winners.

Other companies? They may be paying the price for past over-optimism.