After a turbulent few weeks in the crypto market, Digital Asset Treasury (DAT) companies have been thrust back into the spotlight, and not for the reasons they’d hoped. Bitcoin, Ethereum, and the broader market have suffered sharp declines amid macro fears, including a potential unwind of the yen carry trade if the Bank of Japan lifts rates. Add rising volatility, cascading liquidations, and aggressive short positioning from major institutions, and you get the perfect recipe for investor panic. DAT stocks have been hit especially hard. Companies that once traded at multiples of their modified net asset value (mNAV) — 3x, 5x, even 10x over the summer, are now languishing at or below parity. The fear is simple: as prices fall, will treasuries be forced to dump their crypto to service loans, defend equity valuations, or simply stay solvent? According to James Butterfill, Head of Research at CoinShares, the situation is fragile, but not doomed. “During the summer of 2025, many DATs were trading at 3x, 5x, or even 10x their mNAV and are now all hovering around 1x or even lower. From here, the path splits: either declining prices trigger a disorderly unwind via an aggressive sell-off, or companies hold on to their balances and benefit from a potential recovery in prices. We lean toward the latter, especially given the improving macro backdrop and the possibility of a December rate cut, which would support crypto markets more broadly.” If prices continue to slide, shorts could deepen their attack, especially on companies whose treasuries hold large, illiquid, or highly correlated digital asset reserves. A December Turnaround? The question now is whether DAT firms face a forced-selling doom loop… or the setup for an explosive short squeeze. Butterfill believes the latter remains a strong possibility. “Either declining prices trigger a disorderly unwind via an aggressive sell-off, or companies hold on to their balances and benefit from a potential recovery in prices. We lean toward the latter, especially given the improving macro backdrop and the possibility of a December rate cut, which would support crypto markets more broadly.” Markets may be approaching a pivotal moment. Inflation is cooling, bond markets have stabilised, and speculation is growing that central banks, including the Fed, could deliver a rate cut in December. A cut would weaken the dollar, ease liquidity stress, and potentially trigger a strong rebound across digital assets. That may be all DAT companies need to survive the current storm. DATs Must Now Evolve — or Die Even if a recovery arrives, Butterfill argues the industry must confront uncomfortable structural flaws. “The recent pullback in crypto markets has exposed their structural weaknesses. Several factors contributed to the decline, including the lack of robust operating businesses behind treasury strategies, rotation towards other blockchain-related equity investments, and the overall decline in crypto prices.” Investors have grown far less tolerant of: shareholder dilution ultra-high asset concentration firms with large crypto treasuries but no real revenue Companies using public markets to accumulate tokens rather than build products This behaviour, he says, has damaged the entire sector’s credibility. The DAT Model of the Future Butterfill predicts a cleansing cycle, one that filters out momentum-driven firms and rewards those building real economic value. “As the bubble deflates, the market is re-evaluating which companies genuinely fit the DAT model and which were simply riding momentum. The future of DATs lies in returning to fundamentals: disciplined treasury management, credible business models, and realistic expectations about the role of digital assets on corporate balance sheets.” The winners of the next cycle, he says, will look far more like the DATs originally envisioned: global companies diversified revenue streams digital assets used strategically, not opportunistically long-term balance sheet management, not speculative treasury expansion If markets stabilise, or even turn upward, companies that held the line instead of liquidating may find themselves positioned for strong recovery. In that environment, any asset managers that have a broad short strategy targeting DAT stocks could rapidly unwind, amplifying upside volatility. A December rate cut could be the catalyst.After a turbulent few weeks in the crypto market, Digital Asset Treasury (DAT) companies have been thrust back into the spotlight, and not for the reasons they’d hoped. Bitcoin, Ethereum, and the broader market have suffered sharp declines amid macro fears, including a potential unwind of the yen carry trade if the Bank of Japan lifts rates. Add rising volatility, cascading liquidations, and aggressive short positioning from major institutions, and you get the perfect recipe for investor panic. DAT stocks have been hit especially hard. Companies that once traded at multiples of their modified net asset value (mNAV) — 3x, 5x, even 10x over the summer, are now languishing at or below parity. The fear is simple: as prices fall, will treasuries be forced to dump their crypto to service loans, defend equity valuations, or simply stay solvent? According to James Butterfill, Head of Research at CoinShares, the situation is fragile, but not doomed. “During the summer of 2025, many DATs were trading at 3x, 5x, or even 10x their mNAV and are now all hovering around 1x or even lower. From here, the path splits: either declining prices trigger a disorderly unwind via an aggressive sell-off, or companies hold on to their balances and benefit from a potential recovery in prices. We lean toward the latter, especially given the improving macro backdrop and the possibility of a December rate cut, which would support crypto markets more broadly.” If prices continue to slide, shorts could deepen their attack, especially on companies whose treasuries hold large, illiquid, or highly correlated digital asset reserves. A December Turnaround? The question now is whether DAT firms face a forced-selling doom loop… or the setup for an explosive short squeeze. Butterfill believes the latter remains a strong possibility. “Either declining prices trigger a disorderly unwind via an aggressive sell-off, or companies hold on to their balances and benefit from a potential recovery in prices. We lean toward the latter, especially given the improving macro backdrop and the possibility of a December rate cut, which would support crypto markets more broadly.” Markets may be approaching a pivotal moment. Inflation is cooling, bond markets have stabilised, and speculation is growing that central banks, including the Fed, could deliver a rate cut in December. A cut would weaken the dollar, ease liquidity stress, and potentially trigger a strong rebound across digital assets. That may be all DAT companies need to survive the current storm. DATs Must Now Evolve — or Die Even if a recovery arrives, Butterfill argues the industry must confront uncomfortable structural flaws. “The recent pullback in crypto markets has exposed their structural weaknesses. Several factors contributed to the decline, including the lack of robust operating businesses behind treasury strategies, rotation towards other blockchain-related equity investments, and the overall decline in crypto prices.” Investors have grown far less tolerant of: shareholder dilution ultra-high asset concentration firms with large crypto treasuries but no real revenue Companies using public markets to accumulate tokens rather than build products This behaviour, he says, has damaged the entire sector’s credibility. The DAT Model of the Future Butterfill predicts a cleansing cycle, one that filters out momentum-driven firms and rewards those building real economic value. “As the bubble deflates, the market is re-evaluating which companies genuinely fit the DAT model and which were simply riding momentum. The future of DATs lies in returning to fundamentals: disciplined treasury management, credible business models, and realistic expectations about the role of digital assets on corporate balance sheets.” The winners of the next cycle, he says, will look far more like the DATs originally envisioned: global companies diversified revenue streams digital assets used strategically, not opportunistically long-term balance sheet management, not speculative treasury expansion If markets stabilise, or even turn upward, companies that held the line instead of liquidating may find themselves positioned for strong recovery. In that environment, any asset managers that have a broad short strategy targeting DAT stocks could rapidly unwind, amplifying upside volatility. A December rate cut could be the catalyst.

This December Could Decide the Fate of Digital Asset Treasuries: Here’s CoinShares’ Survival Warning

2025/12/06 22:00

After a turbulent few weeks in the crypto market, Digital Asset Treasury (DAT) companies have been thrust back into the spotlight, and not for the reasons they’d hoped.

Bitcoin, Ethereum, and the broader market have suffered sharp declines amid macro fears, including a potential unwind of the yen carry trade if the Bank of Japan lifts rates. Add rising volatility, cascading liquidations, and aggressive short positioning from major institutions, and you get the perfect recipe for investor panic.

DAT stocks have been hit especially hard. Companies that once traded at multiples of their modified net asset value (mNAV) — 3x, 5x, even 10x over the summer, are now languishing at or below parity. The fear is simple: as prices fall, will treasuries be forced to dump their crypto to service loans, defend equity valuations, or simply stay solvent?

According to James Butterfill, Head of Research at CoinShares, the situation is fragile, but not doomed.

If prices continue to slide, shorts could deepen their attack, especially on companies whose treasuries hold large, illiquid, or highly correlated digital asset reserves.

A December Turnaround?

The question now is whether DAT firms face a forced-selling doom loop… or the setup for an explosive short squeeze. Butterfill believes the latter remains a strong possibility.

Markets may be approaching a pivotal moment. Inflation is cooling, bond markets have stabilised, and speculation is growing that central banks, including the Fed, could deliver a rate cut in December.

A cut would weaken the dollar, ease liquidity stress, and potentially trigger a strong rebound across digital assets.

That may be all DAT companies need to survive the current storm.

DATs Must Now Evolve — or Die

Even if a recovery arrives, Butterfill argues the industry must confront uncomfortable structural flaws.

Investors have grown far less tolerant of:

  • shareholder dilution
  • ultra-high asset concentration
  • firms with large crypto treasuries but no real revenue
  • Companies using public markets to accumulate tokens rather than build products

This behaviour, he says, has damaged the entire sector’s credibility.

The DAT Model of the Future

Butterfill predicts a cleansing cycle, one that filters out momentum-driven firms and rewards those building real economic value.

The winners of the next cycle, he says, will look far more like the DATs originally envisioned:

  • global companies
  • diversified revenue streams
  • digital assets used strategically, not opportunistically
  • long-term balance sheet management, not speculative treasury expansion

If markets stabilise, or even turn upward, companies that held the line instead of liquidating may find themselves positioned for strong recovery. In that environment, any asset managers that have a broad short strategy targeting DAT stocks could rapidly unwind, amplifying upside volatility.

A December rate cut could be the catalyst.

Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact service@support.mexc.com for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.

You May Also Like

Polygon Tops RWA Rankings With $1.1B in Tokenized Assets

Polygon Tops RWA Rankings With $1.1B in Tokenized Assets

The post Polygon Tops RWA Rankings With $1.1B in Tokenized Assets appeared on BitcoinEthereumNews.com. Key Notes A new report from Dune and RWA.xyz highlights Polygon’s role in the growing RWA sector. Polygon PoS currently holds $1.13 billion in RWA Total Value Locked (TVL) across 269 assets. The network holds a 62% market share of tokenized global bonds, driven by European money market funds. The Polygon POL $0.25 24h volatility: 1.4% Market cap: $2.64 B Vol. 24h: $106.17 M network is securing a significant position in the rapidly growing tokenization space, now holding over $1.13 billion in total value locked (TVL) from Real World Assets (RWAs). This development comes as the network continues to evolve, recently deploying its major “Rio” upgrade on the Amoy testnet to enhance future scaling capabilities. This information comes from a new joint report on the state of the RWA market published on Sept. 17 by blockchain analytics firm Dune and data platform RWA.xyz. The focus on RWAs is intensifying across the industry, coinciding with events like the ongoing Real-World Asset Summit in New York. Sandeep Nailwal, CEO of the Polygon Foundation, highlighted the findings via a post on X, noting that the TVL is spread across 269 assets and 2,900 holders on the Polygon PoS chain. The Dune and https://t.co/W6WSFlHoQF report on RWA is out and it shows that RWA is happening on Polygon. Here are a few highlights: – Leading in Global Bonds: Polygon holds 62% share of tokenized global bonds (driven by Spiko’s euro MMF and Cashlink euro issues) – Spiko U.S.… — Sandeep | CEO, Polygon Foundation (※,※) (@sandeepnailwal) September 17, 2025 Key Trends From the 2025 RWA Report The joint publication, titled “RWA REPORT 2025,” offers a comprehensive look into the tokenized asset landscape, which it states has grown 224% since the start of 2024. The report identifies several key trends driving this expansion. According to…
Share
BitcoinEthereumNews2025/09/18 00:40