DATs Lose Momentum as Bitcoin ETFs Capture Investors’ Attention

Digital asset treasury (DAT) firms, once promoted as an innovative route for investors to participate in the crypto surge, are now facing steep declines in share prices and diminishing market faith. This reversal has sparked significant doubts about the viability of their business model, which relies on publicly listed companies holding cryptocurrencies in their treasuries. The drop in market net asset values (mNAVs) and a noticeable decrease in

acquisitions have highlighted mounting instability throughout this industry. Architect Partners reports that the average decline in stock price among the 15 DAT companies it monitors was 15% last week. Firms such as Corp. and provider Inc. have suffered share price drops of 50% and 80% respectively from their recent highs. Experts attribute the deepening crisis to a glut of similar offerings, insufficient differentiation, and increasing equity dilution.

The DAT approach, which enables investors to access crypto markets via publicly traded companies, initially prospered thanks to speculative enthusiasm. However, as more companies—often smaller, rebranded organizations with limited operational activity—have entered the sector, the market has become increasingly crowded and fragmented. While a handful of DATs capitalized on speculative trends, the general tone has now shifted toward greater caution. For example,

Inc. experienced a more than 3,000% single-day surge in its stock price after announcing a fresh investment plan and bringing Wall Street analyst Dan Ives onto its board. Still, such isolated spikes offer little relief against the broader downward trend in the sector. DATs are attractive because they provide leveraged access to crypto through the familiar equity market, but with falling prices and new financing avenues, the business model is increasingly being tested.

The downturn for DATs can be seen not just in sentiment but also in hard metrics. CryptoQuant data shows that

treasury companies acquired just 14,800 Bitcoin in August—a sharp fall from 66,000 in June. The average size of these acquisitions has plummeted by 86% from the 2025 peak. This pullback suggests the model is losing ground both in perception and in actual crypto accumulation. Furthermore, growth in total Bitcoin holdings has slowed dramatically, from 163% in March to a mere 8% in August. These statistics point to a broader sense of fatigue among market participants, who are now questioning the promise of DATs. As mNAVs decrease, the perceived value of token reserves held by these companies drops further, deepening the loss of confidence.

The financial landscape around DATs has also grown more intricate. Crypto lenders, brokerages, and derivatives providers now offer custom financing tools to support these companies, including Bitcoin-collateralized loans, token-linked convertible debt, and structured payout products. While some of these options can offer speed and flexibility beyond what traditional banks provide, they also come with greater risk. For instance, London-based Smarter Web Co., which holds Bitcoin, issued a bond tied to Bitcoin’s value—so if Bitcoin’s price rises, the company’s debt obligation increases. The CEO maintains this approach is less risky than fiat-based debt, but the inherent volatility of crypto makes these products particularly unpredictable.

With DATs struggling to justify their financial structures, mainstream investors are seeking alternatives. Bitcoin ETFs, for example, have drawn considerable investment recently, offering a more transparent and regulated method for crypto exposure. K33 Research notes that global Bitcoin ETPs saw net inflows of 20,685 BTC last week, the highest since July 22. U.S. spot Bitcoin ETFs now collectively hold 1.32 million BTC, setting new records. This migration suggests that investors are shifting toward ETFs due to their stability and regulatory oversight, whereas DATs are increasingly seen as volatile and speculative.

The growing popularity of Bitcoin ETFs and the internal turmoil within DATs have fueled speculation about future industry consolidation. Weaker DATs may eventually be acquired by stronger competitors with larger token reserves, though how this might unfold remains uncertain. For now, the sector appears to be entering a lengthy transition period rather than an abrupt collapse. As share prices continue to fall and crypto acquisitions slow, the future of DATs will likely hinge on their capacity to set themselves apart from the expanding range of crypto investment options.