Crypto Treasuries Are Fading—And Staking ETFs Will 'Eat Their Lunch': SOL Strategies CEO

Canadian-based SOL Strategies is a publicly traded Solana-centric company that has stockpiled the network’s native token—but it doesn’t want to be confused with the growing list of digital asset treasuries (or DATs) that have merely focused on accumulating SOL, the network’s native token. 

“Our thesis is that there's no sustainable market for digital asset treasuries,” SOL Strategies Interim CEO Michael Hubbard told Decrypt. “That's not an interesting business model.”

“They're a proxy financial engineering play that largely was driven by short-term hype. I almost want to say greed, but that seems a bit strong,” he added. "I think we'll see one or two long-term sustainable or successful DATs that kind of control the narrative, that drive the theme, but staking ETFs are going to eat their lunch.” 

Hubbard said that while the original DAT thesis of providing exposure to previously uninvestible assets—either based on geography or other restrictions—was a great thesis, it has lost its luster. 

“Now we have ETFs that provide the same level of exposure, but ETFs are far more regulated and have a very known framework and protections around that,” he added.

ETFs also come from known issuers with controlled and defined expenses, he added, while DATs can have complex balance sheets, warrant overhangs, debt converts, and shares in private placements that haven’t yet been registered for resale.

“The value gap that DATs are filling is narrowing very rapidly,” said Hubbard.

Staking ETFs add a further benefit for investors by letting them get a share of network staking rewards for proof-of-stake assets like Solana and Ethereum. The recently launched Bitwise Solana Staking ETF has seen zero days of outflows since launching in late October, suggesting solid demand for both Solana and staking-enhanced funds.

SOL Strategies was arguably the first Solana treasury firm, rebranding from Cypherpunk Holdings in September 2024 to commit to a focus on the growing layer-1 network and its underlying token, SOL. 

But the company maintains that it’s more than a DAT, instead adopting the DAT++ moniker that lends credence to the brand’s validator business. 

Hubbard, who took over as interim CEO in September with the departure of Leah Wald, is focused on ensuring shareholders and prospective investors are aware of it. 

“What we're really trying to convey to the market right now is our focus is to capture the value of the economy, not the currency,” said Hubbard, speaking about the firm’s focus on the growth of the Solana network and activity, versus just the price of the token. 

“The currency [SOL] is a piece of it. It's a pillar of our foundation,” he added. “But that's why we have the operating business.”

The firm's validator operations had more than 2.8 million SOL or about $364 million in assets under delegation as of its most recently published business update, earning a network average of around 6.45% APY in rewards on that delegated stake. 

It also manages a digital asset treasury of more than 526,000 SOL or greater than $67 million at today’s prices, placing it among the top publicly listed holders of Solana.

“Using the DAT++ term has the negative consequence that we're being lumped into that basket,” said Hubbard of the growing list of Solana treasury firms. “And to be clear, we think that it's very important and valuable for us to have a treasury in Solana, because we believe in Solana, the ecosystem and the asset.” 

But the firm’s interim CEO, who joined in March when it acquired his validator business, Laine, wants to continue to push the narrative that SOL Strategies is not purely focused on the value of the SOL token, and instead aims to be the company that captures the value of the entire Solana economy.

“If I had to, I would say we become like the Berkshire Hathaway of Solana, or the S&P 500 of Solana,” he said when asked about what success looks like for the firm. “We would be just accelerating the ecosystem through our involvement, but at the same time also capturing the value of that entire growth—and we're not tied purely to the price of SOL.” 

Hubbard’s comments come as the year’s digital asset treasury continues to show signs of weakness. Top firms like Bitcoin giant Strategy and leading Ethereum treasury BitMine have seen their stock prices tumble in recent weeks, while some DATS have started selling off their crypto holdings in an attempt to prop up their share prices through stock buybacks.

Shares of SOL Strategies finished up 6% on Friday. Shares in the firm began trading on the Nasdaq earlier this summer as part of its cross-listing with the Canadian Securities Exchange. 

Solana is down about 33% in the last month, recently trading around $127 and more than 56% off its January all-time high of $293.