The digital asset treasury (DAT) is under pressure, but Ethereum remains strong – Standard Chartered

Digital Asset Treasuries – DAT( are facing pressure again after the market Net Asset Value – mNAV) has sharply declined, raising doubts about the ability to maintain the pace of cryptocurrency purchases, according to Geoffrey Kendrick – Head of Digital Asset Research at Standard Chartered.

Listed companies holding digital assets on their balance sheets have seen their stock prices fall in recent weeks, as investors reassess the sustainability of this strategy. Kendrick stated that an mNAV above 1 is a prerequisite for DATs to expand their holdings, while a level below this threshold reflects a weakened balance sheet and the likelihood of a wave of restructuring.

The differentiation in DATs

According to Kendrick, the current correction does not equate to a recession for the entire industry, but may create opportunities for differentiation. Factors such as access to cheap capital, economies of scale, and profits from staking or DeFi will be key determinants in distinguishing the strong from the weak.

The DATs focused on Ethereum are considered the most sustainable, partly due to the staking yield that can directly improve mNAV. Bitmine strategist Tom Lee estimates that the staking profit alone could add 0.6 points to the mNAV of Ethereum-based DATs. This makes Ethereum stand out more compared to Bitcoin or Solana, which lack a similar yield-generating mechanism.

Currently, DAT holds about 4% of the circulating Bitcoin, 3.1% of the circulating Ethereum, and 0.8% of the circulating Solana. Therefore, the financial health of this group is a key factor influencing market demand. Kendrick predicts that consolidation is likely to occur more frequently among Bitcoin DATs, leading to a “rotation of assets” instead of creating additional net demand. In contrast, Ethereum DATs tend to continue accumulating, providing positive momentum for ETH's price against competitors.

Notable names in this field include Bitmine, SharpLink, and The Ether Machine – companies that are being closely watched by investors due to their position at the intersection of digital assets and corporate balance sheets.

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