The Endgame of DAT: Liquidation or Self-Rescue?

Author: Prathik Desai

Compiled and Edited by BitpushNews

Just over a year ago, for many companies seeking to boost their stock prices, becoming a digital asset treasury seemed like an easy decision.

Some Microsoft shareholders convened to ask the board to evaluate the benefits of including some Bitcoin on their balance sheet. They even mentioned Strategy (formerly MicroStrategy), the largest publicly traded Bitcoin DAT.

At the time, a financial flywheel was attracting everyone’s attention.

Buy large amounts of BTC/ETH/SOL. Watch the stock price trade above the value of these assets. Issue more shares at a premium. Use the proceeds to buy more cryptocurrencies. Repeat. This financial flywheel supporting publicly traded stocks seemed almost perfect, enough to tempt investors. They paid over two dollars just to gain indirect exposure to Bitcoin worth only one dollar. It was a crazy era.

But time tests the best strategies and flywheels.

Today, with over 45% of the crypto market cap evaporated in the past four months, most of these packaged companies’ market-to-net asset value ratios have fallen below 1. This indicates that the market values these DAT companies below the worth of their crypto treasuries. This has changed how the financial flywheel operates.

Because a DAT is not just a package of assets. In most cases, it’s a company with operating expenses, financing costs, legal and operational fees. During the mNAV premium era, DATs raised funds by issuing more shares or taking on more debt to finance their crypto purchases and operational costs. In the mNAV discount era, this flywheel breaks down.

In today’s analysis, I will show what sustained mNAV discounts mean for DATs and whether they can survive the crypto bear market.

Between 2024 and 2025, over 30 companies are vying to transform into DATs. They are building treasuries around blue-chip coins like Bitcoin, ETH, and SOL, and even meme coins.

At the peak on October 7, 2025, the crypto held by DATs was worth $118 billion, with the total market cap of these companies exceeding $160 billion. Now, the crypto held by DATs is worth $68 billion, and their discounted total market cap is just over $50 billion.

All their fates hinge on one thing: their ability to package assets and craft stories that justify a valuation premium over the assets’ worth. This difference becomes the premium.

The premium itself becomes a product. If a stock trades at 1.5 times its mNAV, a DAT can sell stock worth $1 and buy crypto exposure worth $1.50, describing the transaction as “value-added.” Investors are willing to pay a premium because they believe DATs can continue to sell stock at a premium and use the proceeds to accumulate more crypto, thereby increasing the crypto assets per share over time.

The problem is, premiums don’t last forever. Once the market stops paying extra for this packaging, the “sell stock to buy more crypto” flywheel stalls.

When stocks no longer trade at 1.5 times their asset value, the amount of crypto bought with each new share issued decreases. The premium turns into a discount.

Over the past year, leading BTC, ETH, and SOL DATs’ stock prices have fallen more than the cryptocurrencies themselves.

Once the premium relative to the underlying assets disappears, investors naturally ask: why can’t they buy crypto more cheaply elsewhere, such as on decentralized or centralized exchanges, or through ETFs?

Bloomberg’s Matt Levin posed an important question: if DATs are trading below their net asset value, let alone at a discount, why wouldn’t investors push the company to liquidate its crypto treasury or buy back stock?

Many DATs, including the sector leader Strategy, try to convince investors that they will hold their crypto through the bear cycle, waiting for the premium era to return. But I see a more critical issue. If DATs cannot raise additional funds in the foreseeable long term, where will they get the capital to sustain operations? These DATs have bills and salaries to pay.

Strategy is an exception, for two reasons.

Reportedly, it holds $2.25 billion in reserves, enough to cover its dividend and interest obligations for about 2.5 years. This is significant because Strategy no longer relies solely on zero-interest convertible bonds for funding. It has also issued preferred instruments that require paying substantial dividends.

It also has an operational business, however small, that generates recurring revenue. In Q4 2025, Strategy reported total revenue of $123 million, with a gross profit of $81 million. While Strategy’s net profit may fluctuate significantly each quarter due to changes in crypto asset prices valued at market, its business intelligence division is its only tangible cash flow source.

But this still doesn’t make Strategy’s strategy invulnerable. The market can still punish its stock—as it has over the past year—and weaken Strategy’s ability to raise funds at low cost.

While Strategy might survive the crypto bear market, emerging DATs lacking sufficient reserves or operational businesses to cover their inevitable expenses will feel the pressure.

This distinction is even more apparent in ETH DATs.

The largest Ethereum-based DAT—BitMine Immersion—has a marginalized operational business supporting its ETH treasury. In the quarter ending November 30, 2025, BMNR reported total revenue of $2.293 million, including consulting, leasing, and staking income.

Its balance sheet shows the company holds $10.56 billion in digital assets and $887.7 million in cash equivalents. BMNR’s operations resulted in a net negative cash flow of $228 million. All cash needs are met by issuing new shares.

Last year, because BMNR’s stock traded at a premium to mNAV most of the time, raising funds was relatively easy. But over the past six months, its mNAV has fallen from 1.5 to about 1.

So what happens when the stock no longer trades at a premium? Issuing more shares at a discount could lower the ETH price per share, making it less attractive to investors than directly buying ETH from the market.

This explains why BitMine announced last month it would invest $200 million to acquire shares of Beast Industries, a private company owned by YouTube influencer Jimmy “MrBeast” Donaldson. The company said it would “explore ways to collaborate on DeFi projects.”

ETH and SOL DATs might also argue that staking income—which BTC DATs cannot boast—can help them survive market crashes. But that still doesn’t solve the issue of meeting cash flow obligations.

Even with staking rewards—accumulated in ETH or SOL—if these rewards are not converted into fiat currency, DATs cannot use them to pay wages, audit fees, listing costs, or interest. Companies must either have sufficient fiat income or sell or re-mortgage treasury assets to meet cash needs.

This is very evident in the largest SOL holder DAT—Forward Industries.

FWDI reported a net loss of $586 million in Q4 2025, despite earning $17.381 million in staking and related income.

Management explicitly stated that their “current cash balance and working capital are sufficient to meet our liquidity needs at least until February 2027.”

FWDI also disclosed an active capital-raising strategy, including issuing stock at market prices, buybacks, and a tokenization experiment. However, if the long-term absence of a premium to mNAV persists, all these efforts may fail to manage its packaging price.

The road ahead

Last year’s DAT craze centered on the speed of asset accumulation and the ability to raise funds through premium stock issuance. As long as the packaging trades at a premium, DATs can continue converting expensive equity into more crypto per share, calling it “beta.” Investors also pretend that the only risk is asset prices themselves.

But premiums won’t last forever. Crypto cycles can turn them into discounts. I first raised this issue shortly after the October 10, 2022 liquidation event when I observed premiums decline.

However, this bear market will force DATs to evaluate: once their packaging no longer trades at a premium, should they still exist?

One way out is for companies to improve operational efficiency, using a cash-flow-positive business or surplus reserves to supplement their DAT strategy. Because when the story no longer attracts investors in a bear market, a conventional company story will determine survival.

If you’ve read “Strategy & Marathon: Faith and Power,” you’ll recall why Strategy has remained resilient across multiple crypto cycles. But a new wave of companies like BitMine, Forward Industries, SharpLink, and Upexi cannot rely on the same strength.

Their current attempts at staking yields and weak operational businesses may collapse under market pressure unless they consider other options to cover real-world obligations.

We’ve seen this with ETHZilla, which last month sold about $115 million worth of ETH holdings and bought two jet engines. Subsequently, the DAT leased the engines to a major airline and hired Aero Engine Solutions for monthly management fees.

Looking ahead, people will evaluate not only their digital asset accumulation strategies but also the conditions for their survival. In this ongoing DAT cycle, only those that can manage dilution, debt, fixed obligations, and trading liquidity will weather the downturn.