DAT Sector: From Exponential Transition to "Continuation" Divergence

By 2025, the Digital Asset Treasury (DAT) industry has shown a remarkable combination of rapid growth and sharp decline. While the number of companies has quadrupled in four years, the sector’s fast development has made issues faced by well-known firms like ALT5 Sigma, MicroStrategy, and Metaplanet understandable: internal disorder, liquidity problems, and management challenges have revealed the true resilience of the DAT model. Therefore, the industry’s current question is simpler: “Will the DAT sector continue or not?”

Signs of Sector Transition and Metric Growth

Since 2020, the number of DAT companies has increased from 4 to 142—an over 35-fold growth. CoinGecko analysis indicates that only in 2025, 76 new DATs were added, setting a historical record. But numbers are just the first point: real transformation is hidden in sectoral structural changes.

These companies’ main assets are limited to Bitcoin (142), Ethereum (15), and Solana (10). MicroStrategy remains the largest DAT, holding nearly $56.6 billion in BTC. BitMine ranks second, managing about $10.6 billion. However, in the second half of 2025, the sector experienced a sharp correction—market capitalization dropped from $176 billion to $77 billion—causing the sector’s stocks to show radical beta activity.

Understanding Separation and Discount

In the first half of 2025, Bitcoin repeatedly hit new highs, and stock prices grew several times faster than Bitcoin’s value. The so-called “Altcoin DATs” naturally experienced equal or greater growth. However, in Q4, policy issues and liquidity constraints sharply changed the market.

Strategy in November declined by 36%, and Metaplanet fell nearly 80%. ALT5 Sigma, after announcing a $1.5 billion raise for the Trump family’s World Liberty Financial project, saw its stock price drop from $9 to nearly $2 amid internal disorder, declining sentiment, and suspicions of money laundering in Rwanda.

This situation was clearly expressed by Bitwise CIO Matt Hougan: the movement of DATs “resembles another leverage index.” But a new phase emerged—“separation”: well-managed DATs are sold at premium prices, while poorly managed and underperforming ones remain at a constant discount. “Continuation” is now determined not just by coin quantity but also by management, financing capacity, and operational profitability.

From “Balance” Illusion to Real Assets

DAT valuation relies on mNAV (market NAV)—the calculation of each treasury’s assets per share compared to the share price. But sectoral institutions have explicitly stated: this system creates a “false sense of security.”

Galaxy Digital analysis shows that no matter how many coins are recorded on paper, they cannot all be bought at that price. Altcoin DATs have very low liquidity; slippage is significant; the entire bundle distorts the market price. Animoca Brands emphasizes that mNAV never accounts for debt structures. Many DATs rely on convertible bonds and PIPE financing; despite a large balance sheet, only a small part belongs to shareholders.

Breed VC sees the issue more deeply: operational expenses in DATs constantly erode the treasury’s nominal value. In transparency efforts, “real free assets” decrease year by year. Matt Hougan adds that DAT costs grow over time with interest, not remain static. For investors, the mNAV problem is hidden across various segments:

• Balance sheet ≠ cash available for distribution
• Treasury assets ≠ real contribution shareholders can receive
• Debt, dilution, and expenses continually reduce active assets
• Management events can immediately increase discounts

Therefore, mNAV remains only a starting point; the true “continuation” depends on cash flow, expense ratios, and management quality of the underlying funds.

Different Continuation Strategies of DAT Companies

Under pressure, DAT firms are experimenting with various “continuation” options:

Strategy 1: Financing Continuation
MicroStrategy’s approach—continue acquiring Bitcoin via convertible bonds even in weak markets. Metaplanet sold part of its Bitcoin holdings to pay short-term debts. This approach can increase or maintain “coins per share,” but requires high financing capacity.

Strategy 2: Operational Continuation
Companies like Core Scientific, Hut 8, Iris Energy are shifting from mining capacity or core resources to AI, nodes, and storage services. They are moving from a “treasury-based” model to a “cash flow-based” model, where “continuation” depends not just on coin prices but on actual business operations.

Strategy 3: Foundation and Supporters
SEC monitoring has intensified; Strategy and BitMine are conducting real-time audits, making treasury evidence more transparent. Despite rising costs, investor confidence remains essential for continuation.

Strategy 4: Just Passing Time
Small and medium DATs without financing channels may sell assets to survive. But this is only a way to pass time, not true “continuation.”

Who Will Continue in the Future?

The “running phase” of the DAT industry is ending, and a true “choice” era has begun. DATs with high liquidity, stable cash flows, ongoing financing channels, and strong management will survive.

Many small DATs will disappear due to liquidity shortages, lack of financing, and negative market narratives. Therefore, the conditions for “continuation” have become more demanding: just holding coins is no longer enough. Outside the treasury—operational quality, management robustness, and investor confidence—are now the real tests for DATs.

The industry is shifting from a “running” to a “choice” phase. Who continues? Those inspired by management, financing, or operational capabilities.