US regulators pour cold water: How long can the DAT market stay hot?

In the summer of 2025, "Digital Asset Treasury" (DAT) is undoubtedly the hottest topic in the capital markets. From the continued accumulation by bitcoin (BTC) treasury leader Strategy, to a number of small and medium-sized listed companies directly purchasing crypto assets through financing, the DAT model has been given the narrative of a "crypto version of reserve assets," with stock prices often soaring following announcements.

However, with the obvious slowdown in bitcoin treasury expansion and news of strengthened scrutiny by U.S. regulatory agencies (Further reading: Nasdaq steps in! Strict regulation of "crypto-speculating" listed companies), the heat of this market is now being questioned. With the regulatory cold water poured on, how much longer can the DAT market stay hot?

The "Wealth Flywheel" of the DAT Model

The core logic of the DAT (Digital Asset Treasury) model is: listed companies raise funds through stocks, bonds, convertible bonds, etc., and then use the raised funds directly to purchase bitcoin, ethereum, and other crypto assets. As token prices rise, the book value increases, the company's stock price benefits in tandem, and its refinancing ability is further enhanced, forming a classic "wealth flywheel":

1. Financing: Using the "crypto asset strategy" as a story to attract secondary market funds.

2. Token Purchase: Directly converting financing funds into BTC/ETH and other mainstream assets.

3. Valuation Increase: Book value rises, and stock price premium is significant.

4. Refinancing: Higher market cap and attention bring lower-cost financing.

The earliest successful case of this model is MicroStrategy (now renamed Strategy), which, through continuous financing and token purchases over the past few years, became the world's largest bitcoin treasury. Its stock price is highly correlated with bitcoin, and the company once raised $42 billion through stock and bond issuance for bitcoin purchases, with its stock price premium over its bitcoin holdings reaching as high as 20% at one point.

Japanese company Metaplanet has also followed suit, attracting capital through bitcoin holdings and recycling to increase its position. This model not only increased the company's valuation but also stimulated bitcoin price increases, driving the entire market into a high-growth phase. By the first half of 2025, the average corporate bitcoin purchase per transaction reached 1,200 coins (Strategy) and 343 coins (other companies).

Data: Bitcoin Treasury Growth Significantly Slows

After August 2025, the expansion rate of BTC treasuries saw a significant decline. According to Bitbo, corporate bitcoin purchases dropped 86% from the peak in the first half of the year, with the average bitcoin amount per transaction plummeting. In the past month, BTC treasury holdings increased by only about 16%, far below the over 90% monthly growth at the beginning of the year. Except for leading companies continuing to steadily increase their positions, more listed companies are choosing to wait and see, or even suspend new token purchases.

In sharp contrast, ETH treasuries are showing a rapid upward trend. The top three companies collectively purchased over 1.7 million ETH in August, far exceeding the increase in BTC treasuries during the same period. The reason is that the ETH ecosystem itself can generate additional returns through staking, making the narrative more in line with "capital efficiency" logic, and resulting in a clear structural shift in market funds.

In other words, the heat of bitcoin treasuries is cooling, while ETH treasuries are accelerating. The overall DAT story is still ongoing, but the distribution of funds has shifted from "universal frenzy" to "structural differentiation."

This slowdown is not sudden, but the result of multiple factors combined.First, market maturation has led to reduced volatility. Bitcoin's annualized volatility has dropped from nearly 200% in its early days to about 50%, shifting from speculation-driven to mature allocation. The early "flywheel effect" has weakened, and companies can no longer easily achieve soaring stock prices through bitcoin holdings. Second, macro liquidity is recovering slowly. Although the Federal Reserve has cut interest rates, there is no obvious FOMO sentiment among off-market funds. Finally, regulatory factors have become the biggest obstacle, especially with Nasdaq's intervention.

Regulation: Nasdaq Strengthens Scrutiny

According to foreign media The Information, the Nasdaq exchange is strengthening regulation of DAT model listed companies (Nasdaq steps in! Strict regulation of "crypto-speculating" listed companies), focusing on those "raising funds to buy tokens and boost stock prices." The main regulatory measures include:

1. Mandatory Disclosure of Fund Usage: Companies must clearly state whether the raised funds are directly used for token purchases.

2. Shareholder Vote Requirement: Some high-proportion crypto asset allocations require approval by shareholder meetings.

3. Enhanced Risk Disclosure: Listed companies must detail the financial risks from crypto asset volatility in financial reports and announcements.

4. Higher Refinancing Thresholds: For companies that frequently issue new shares and quickly convert to token purchases, scrutiny is becoming stricter.

This series of measures is essentially putting the brakes on the market. In the short term, this has led to a collective pullback in DAT concept stock prices, with some small-cap stocks that previously surged on announcements suffering heavy losses. The regulatory cold water is directly dampening speculators' enthusiasm.

Despite stricter regulation, there are still extreme cases in the market where "announcements trigger surges." For example, after Eightco announced in September that it would raise $270 million to purchase Worldcoin tokens, its stock price once soared nearly 5000%, with trading volume tens of thousands of times the usual. Such cases show that short-term funds remain highly sensitive to the "crypto + treasury" narrative.

However, the more extreme the surge, the more it becomes a target for regulators and short sellers. It reminds us: the market is not cooling across the board, but has entered a stage of "long-tail frenzy, leading companies stabilizing." Leading companies continue to advance steadily, while long-tail thematic stocks are swinging between speculation and regulatory pressure.

Is It Overheated?

To judge whether the DAT market is overheated, it can be broken down into three dimensions:

1. Valuation and Pricing

• NAV Premium Rate: The premium of stock price over the net asset value of holdings. Some companies have premiums exceeding 80%, clearly indicating speculation.

• Equity Dilution Cost: The dilution required to add $1 of assets. If dilution keeps increasing, it means the model is unsustainable.

2. Capital and Pace

• Holding Growth Rate: BTC treasuries have slowed, while ETH treasuries are still running fast. There is a "scissors gap" in market heat.

• New Funding Channels: For example, the $500 million DAT fund launched in Hong Kong shows that institutional backup funds are still entering the market.

3. Regulation and Governance

• Listing and Financing Thresholds: After regulatory tightening, the path of rapid share issuance for token purchases is restricted.

• Extreme Behavior Samples: Surges like Eightco's are magnifying glasses for market overheating.

Overall, the heat of the DAT market has not completely faded, but is in a state of "localized overheating + mainline cooling."

Outlook: Three Possible Paths

In the future, the DAT market may evolve along three paths:

1. Standardized Development: Leading companies continue to expand under compliance frameworks and are gradually valued as alternative asset management enterprises.

2. Long-tail Clearance: Small and medium-sized companies that rely excessively on speculation are eliminated due to financing difficulties and increased regulatory pressure.

3. Capital Diversion: More capital may shift from BTC treasuries to ETH treasuries, or enter new products undertaken by compliant funds.

In other words, the cold water does not make the boom disappear completely, but brings the market back to differentiation: DAT models with real governance, transparency, and capital efficiency will remain, while speculative "shell companies speculating on tokens" will be the first to exit.

Therefore, the DAT market has not fully peaked, but "how long it stays hot" no longer depends on speculative stories, but on: further clarification of regulatory rules, governance and transparency of leading companies, and capital allocation choices between BTC and ETH. After the cold water, the DAT market may become less frenzied and more stable. For investors, this may be a new opportunity.