Bitcoin News Today: DATs: A 1920s-Style Speculation in the Age of Bitcoin ETFs

The rise of Digital Asset Treasuries (DATs)-corporate vehicles designed to outperform Bitcoin through financial engineering-has hit a roadblock in 2025. Despite promises of leveraging balance-sheet strategies and debt financing to amplify returns, most DATs have failed to surpass the gains of Bitcoin or exchange-traded funds (ETFs) tracking the cryptocurrency. Only a handful, such as Japan's Metaplanet and Twenty One Capital, have managed to outperform, according to a recent analysis by Coindesk[1].

Bitcoin itself has surged 23% year-to-date, outpacing the performance of DATs like MicroStrategy, Semler Scientific, and Trump Media. This gap highlights a core weakness in the DAT model: reliance on leverage, equity premiums, and favorable debt markets. For instance, Strategy Inc. (formerly MicroStrategy) holds $8 billion in debt with an average coupon of 0.42%, a structure that becomes precarious in a rising interest rate environment[1]. Galaxy Digital and NYDIG have warned that the DAT model depends on persistent premiums to net asset value (NAV), a dynamic reminiscent of the 1920s investment-trust boom[1].

Meanwhile, Bitcoin ETFs have become a dominant force in the crypto market. As of August 2025, U.S. spot Bitcoin ETFs hold 1.296 million BTC, or 6.5% of the total supply, with BlackRock's IBIT alone managing $87.7 billion in assets[3]. These funds provide a steady, rules-based demand for Bitcoin, stabilizing price movements and improving liquidity. The influx of institutional and retail capital into ETFs has also driven Bitcoin's price higher, with ETF inflows reaching $14.8 billion year-to-date[2].

The structural risks of DATs are further compounded by regulatory and market uncertainties. Japanese regulators, for example, have been cautious about approving Bitcoin ETFs, citing concerns over volatility and investor protection[4]. However, Japan's Financial Services Agency (FSA) announced plans in 2025 to reduce crypto taxes from 55% to 20% and potentially approve Bitcoin spot ETFs by 2026[5]. This shift could spur global adoption but also expose DATs to increased competition from more streamlined investment vehicles.

Industry experts have sounded alarms about the fragility of the DAT model. Jim Chanos, a hedge fund manager known for shorting Enron, compared DATs to speculative booms of the past, warning that oversaturation could erode the premiums that drive their growth[6]. Similarly, Anthony DeMartino of Sentora noted that DATs face risks of mNAV compression (a decline in the market-to-net-asset-value ratio), debt refinancing challenges, and regulatory scrutiny under the Investment Company Act of 1940[7]. These vulnerabilities could trigger a self-reinforcing cycle of declining stock prices, forced asset sales, and further market volatility.

Despite these challenges, corporate adoption of Bitcoin remains robust. Bitwise data shows a 40% increase in public companies holding Bitcoin since three months ago[1]. Firms like Coinbase and mining entities have integrated Bitcoin into their treasuries, while others use it as a hedge against fiat instability. However, many of these companies are DATs themselves, raising questions about their ability to generate operational alpha compared to ETFs.

The broader market is also grappling with the implications of DATs' leverage-heavy strategies. VanEck reported that DATs collectively hold $135 billion in assets, with Strategy Inc. accounting for over half of that total[8]. Yet, as Bitcoin's volatility declines with growing institutional adoption, DATs may struggle to sustain the capital-raising mechanisms that underpin their model.

For now, the simplest advice from industry leaders remains compelling. "Just buy an ETF," Strive Asset Management CEO Matt Cole advised at a Hong Kong conference in August[1]. As ETFs continue to streamline access to Bitcoin and reduce costs, DATs face an uphill battle to prove their value proposition. Until they can demonstrate consistent outperformance through operational yield or network participation, the passive, low-cost ETF route may remain the most attractive option for investors.

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