Infighting, scandals, stock price ankle cuts: What else can DAT rely on to survive?

ALT5 Sigma is undergoing a typical “DAT battlefield.”

This company, which is listed on NASDAQ and originally focused on blockchain financial infrastructure, made a high-profile announcement in August this year to transform into a Digital Asset Treasury (DAT) company, planning to raise up to $1.5 billion to bet on the governance token of World Liberty Financial (WLFI), backed by the Trump family.

However, just three months later, the backlash came swiftly: the stock price plummeted nearly 80% from $9, briefly falling below $2. Within the company, the CEO was suspended, and employees received warnings of lawsuits and regulatory investigations; worse still, ALT5 was exposed by the well-known media outlet The Information for allegations of money laundering involving its subsidiary in Rwanda, and this critical information was not adequately disclosed to the board and investors during the World Liberty trading negotiations and public relations phase.

ALT5 is more like an “amplified sample” that has walked through all the risks of the DAT model: internal governance chaos, extreme concentration exposure to a single token, delayed or even missing information disclosure, and stock price collapse under regulatory scrutiny.

But it is not an isolated case; rather, it is a microcosm of the entire DAT industry transitioning from a “wealth myth” to a “mess” in 2025.

From explosive growth from 4 to 142 companies, to differentiation.

The deeper reason for the controversy surrounding ALT5 is that the quantity and scale of DAT are expected to experience “exponential growth” by 2025.

The report “Digital Asset Treasury Companies (DATCo)” released by CoinGecko in November shows:

• The number of DAT companies skyrocketed from 4 in 2020 to 142 in 2025;
• An additional 76 companies were established in 2025, a historical high;
• The “pure gold vault type” DAT generally imitates the Strategy (formerly MicroStrategy) model that started heavily investing in BTC in 2020;
• The vast majority of DAT assets are Bitcoin:

• Approximately 142 companies hold BTC.
• The companies holding ETH = 15
• The companies holding SOL = 10

This means: DAT = an industry with BTC as the core asset.

The latest data from DefiLlama shows:

• Strategy remains the world's largest DAT, holding BTC valued at 56.6 billion dollars;
• The second place is BitMine, founded by Tom Lee, holding a total of approximately 10.6 billion USD in ETH and BTC.

It can be seen that DAT is not unilaterally scattered, but presents a typical structure of “large head + long tail.”

However, behind the explosive growth, risks are also accumulating. Since the beginning of this year, the overall market value of DAT Company has dropped from a peak of $176 billion to less than $100 billion against the backdrop of a correction in crypto assets, evaporating more than $77 billion.

In the first half of 2025, Bitcoin reached new highs multiple times, and DAT companies generally exhibited high Beta characteristics: mainstream treasury stocks often surged several times compared to Bitcoin's increase, and some narratives with stronger appeal, the “Altcoin treasury stocks,” even saw tenfold increases.

However, as October entered a period of dual tightening in policy and liquidity, the market capitalization of cryptocurrencies evaporated by nearly a trillion dollars, and the stock price of DAT began to collectively decline belatedly. Strategy fell by over 36% in November alone, Metaplanet retreated nearly 80% from its peak this year, and ALT5 became a sample-level “plummeting stock.”

This round of decline has also exposed the core vulnerability of DAT: their “value support” is not traditional cash flow and operating business, but the crypto assets in the treasury.

As prices pull back, the market value and treasury value will shrink in tandem, while financing capability, debt repayment ability, and narrative heat will also quickly decline.

Bitwise CIO Matt Hougan pointed out in a recent tweet that in the first six months of this year, the DAT stock price showed a high degree of synchronized ups and downs, resembling a basket of “crypto high-leverage indices”; however, going forward, there will be a divergence. “Companies that can continuously increase the amount of tokens held per share will trade at a premium; while DAT with weak management and poor asset structure will continue to trade at a discount, and may even face acquisition or liquidation.”

In other words, the homogenization frenzy of DAT has come to an end, and the industry is entering a “differentiation screening period.”

The Truth Behind Differentiation: Valuation Illusion, mNAV, and Hidden Risks

The valuation system of DAT has always relied on an important indicator: mNAV (market NAV) That is: the book value of the vault assets is converted into per share and then compared with the stock price to see if the company is “discounted.”

But several industry organizations have clearly pointed out: mNAV creates a “false sense of security.”

Galaxy Digital emphasized in its July report: The amount of coins written on the books does not mean they can be sold at that price. Especially for the Altcoin treasury, with poor liquidity and high slippage, selling itself is a price disaster.

Animoca Brands pointed out: mNAV completely ignores the debt structure of DAT. Many companies rely on convertible bonds and PIPE financing; although the balance sheet may show a large treasury, the portion that truly belongs to the shareholders is continuously diluted.

Breed VC reminds: Without a main business, DAT's operating losses will continue to erode the value of the treasury. The reported assets look impressive, but the actual free assets are decreasing year by year.

Bitwise CIO Matt Hougan added: The cost and risk of DAT grow “compounding over time,” rather than being static.

For ordinary investors, the issue of mNAV can be simply understood in four sentences:

• Book value ≠ Liquidation value
• Vault Assets ≠ Assets that Shareholders Can Access
• Debt, dilution, and expenses will erode the treasury
• Governance and regulatory events can turn discounts into traps in an instant

Therefore, mNAV can only serve as a starting point, and not as the “value anchor” of DAT; the “structural risk” is the most important main line.

In other words, the DAT industry is being forced to “return to business logic”—scale, cash flow, governance, and transparency are becoming new competitive barriers.

How can DAT save itself? **

Faced with the sharp decline in stock prices and regulatory pressure, DAT Company is trying different self-rescue paths.

One of the most common actions is to directly sell part of the treasury assets to alleviate debt or maintain operations. For example, after a significant drop in stock prices this autumn, Japan's Metaplanet sold some of its Bitcoin positions to pay off short-term liabilities, which temporarily stopped the bleeding of its stock price. However, this approach can only solve the immediate problem and weakens the “treasury story” itself, making it difficult to restore long-term confidence.

In contrast, some companies with strong financial strength choose to replicate the path of Strategy – continuing to increase their holdings during pullbacks. Strategy (formerly MicroStrategy) has continued to buy BTC through convertible bonds during the past two rounds of declines, resulting in an increase in the “per share holding amount” against the trend, which has made it one of the first companies in the industry to restore premiums during the rebound in 2024–2025. Similar strategies have also been adopted by larger DATs like BitMine, but for small and medium-sized companies, this path requires strong financing capabilities to support it, and the cost of failure is extremely high.

Another trend is closer to “transformational self-rescue.” Some mining-related DATs, such as Core Scientific, Hut 8, and Iris Energy, are outsourcing their computing power or technological capabilities to AI, nodes, clearing, and custody businesses to reduce reliance on a single coin price. They are beginning to transition from “treasury-driven valuation” to “cash flow-driven valuation.” Although the transformation is still in its early stages, it at least provides a new narrative pivot for treasury stocks.

Regulatory pressure is also changing the behavior of DAT. Since the beginning of this year, the U.S. SEC has required several DATs to disclose in detail their treasury pricing methods, convertible bond structures, and audit arrangements. Affected by regulatory signals, large DATs such as Strategy and BitMine have begun to introduce more frequent treasury proofs and even collaborate with the Big Four for real-time audits. Although the increase in transparency brings short-term costs, it may become the only path to gain investors' trust in the future.

Overall, DAT's “self-rescue” is heading towards three distinctly different paths:

• Companies that are able to sustain financing choose to increase their positions against the trend, attempting to continue the story of a “growth-oriented treasury”;
• Companies with technical or resource endowments are transforming towards operational capabilities, striving to break free from a single reliance on coin prices;
• Small and medium-sized DATs, lacking cash flow and financing channels, can only survive by selling off assets.

The operating logic of the industry has shifted from “as long as you buy coins, they will rise” to “competition in hard power of scale, transparency, and governance capabilities.”

The DAT that can truly withstand cycles in the future is likely to be those companies that hold highly liquid core assets, have stable businesses and acquisition capabilities, and can continuously improve in governance and disclosure.

And more small and medium DATs will eventually be eliminated in the cracks of market volatility and tightening regulations after losing liquidity, financing, and narrative. This means that with the end of the frenzy era, the DAT industry is迎来 a real “race for survival” - Who can survive? It depends on things outside the vault.

Author: Seed.eth