Shares in companies that stockpile Bitcoin and other crypto tokens are under pressure amid fresh turbulence in the cryptocurrency market. These so-called ‘Digital Asset Treasury’ (DAT) firms have seen their values decline, sparking worries about potential instability in this rapidly expanding sector. The rise in DAT companies, spurred by factors such as the success of Michael Saylor’s Strategy and favourable crypto policies, has led to a boom in publicly traded entities investing in cryptocurrencies with the expectation of price appreciation.
However, recent concerns surrounding a possible AI bubble and uncertainties regarding potential interest rate cuts by the U.S. Federal Reserve have negatively impacted risk assets. This has resulted in Bitcoin hitting its lowest level since April, causing many DAT companies to falter. Data indicates that at least 15 Bitcoin treasury companies were trading below the net asset value of their token holdings. Given that DATs collectively hold a significant portion of various cryptocurrencies, their financial performance could have considerable implications for coin prices.
Strategy, a company that pioneered corporate Bitcoin hoarding, has seen its shares plummet by almost 36% in November alone. As the Bitcoin DAT sector became saturated, new entrants have diversified into other cryptocurrencies, including Ether. Companies such as Bitmine and Sharplink Gaming are increasing their Ether holdings. While their shares initially surged following the announcement of these stockpiling plans, they have since fallen from their 2025 peaks.
Unlike Bitcoin DATs, which rely solely on price appreciation, Ether can be used in staking. Staking is a process where Ether holders assist in securing and validating blockchain transactions in exchange for rewards, typically paid in more Ether. This provides Ether DATs with additional revenue streams for generating and accumulating tokens. Some smaller DAT companies are also venturing into more volatile tokens to enhance profits, potentially increasing the volatility risk for their share prices. ALT5 Sigma, for instance, has adopted a DAT strategy focused on accumulating World Liberty Financial, the Trump family’s cryptocurrency venture.
