Bitcoin News Today: Hong Kong Warns DAT Premiums Could Evaporate Overnight, Spurring Sell-Off

The decline of data-trust (DAT) strategy stocks has intensified scrutiny from investors and regulators, with Marathon Digital Holdings (MSTR) tumbling 53% from its recent high and major meme DATs plummeting over 80%. The sell-off reflects growing concerns over the sustainability of premiums embedded in these vehicles, particularly as regulatory scrutiny mounts and market dynamics shift.

Hong Kong's regulatory authority has emerged as a key voice of caution, warning that the "significant premium" observed in DATs—often measured by the ratio of a company's market capitalization to the value of its holdings (mNAV)—could evaporate rapidly under formalized oversight. Wong Tin-yau, a senior official, highlighted that DATs typically trade above their net asset value but cautioned that this premium might vanish "within a day" once stricter rules are implemented, according to a Yahoo Finance report. This skepticism is amplified by real-world examples, such as MSTR, whose mNAV has eroded despite Bitcoin's price gains. As of October 30, MSTR's share price had fallen 3.6% year-to-date, illustrating the disconnect between underlying asset values and stock performance.

Meanwhile, broader market volatility has accelerated outflows from crypto-related investment vehicles. On October 29 alone, U.S. Bitcoin ETFs recorded net outflows of $470.71 million, while Ethereum ETFs lost $81.44 million, according to Coinpedia. The selloff coincided with Federal Reserve Chair Jerome Powell's indication that the recent 25-basis-point rate cut might be the last of 2025, sparking uncertainty about future monetary policy. Fidelity's Bitcoin ETF (FBTC) led the exodus with $164.36 million in outflows, followed by Ark & 21Shares' joint product with $143.80 million. Ethereum ETFs saw similar pressure, with Fidelity's FETH product losing $69.49 million. Bitcoin's price dropped 3.71% to $108,325.44, while Ethereum fell 2.68% to $3,904.19.

The decline in DATs and ETFs underscores a broader trend of investor caution. Hong Kong's regulatory warnings and the Fed's policy ambiguity have created a perfect storm, eroding confidence in strategies that rely on asset premiums. For investors, the message is clear: the high-risk, high-reward model of DATs may no longer be viable in a tightening regulatory and macroeconomic environment.