Institutional Chess Match: Crypto Treasuries Enter High-Stakes PvP Era

Coinbase researchers have highlighted that digital asset treasuries (DATs) are transitioning into a "player-versus-player" (PvP) phase, where early adopters can no longer rely on scarcity premiums to maintain their market dominance. According to the firm, this competitive environment demands superior execution, governance, and strategic differentiation for firms to thrive. The DAT market has accumulated over 1 million BTC and nearly 5% of Ethereum’s circulating supply, giving institutional players a growing influence over market supply and demand dynamics.

The initial adoption phase of DATs has ended, and the market is now at a “critical inflection point,” as noted by Coinbase’s David Duong and Colin Basco. They emphasized that companies must now focus on execution and market positioning rather than merely copying strategies like MicroStrategy’s to succeed. The period of guaranteed multiple of Net Asset Value (mNAV) premiums is over, and the market is increasingly scrutinizing performance, capital structures, and risk management capabilities.

The shift into the PvP stage brings two key implications for the crypto market. First, institutional demand for BTC and ETH is expected to provide ongoing support for prices in the short term, similar to the liquidity effects seen during ETF rollouts. Second, competition is squeezing the share price and trading fee premiums that early movers once enjoyed. As more firms enter the space and investors compare performance across entities, companies are compelled to innovate and optimize operations to maintain their market position.

Coinbase also expressed a constructive outlook on the crypto market heading into the fourth quarter. They anticipate continued support from favorable macroeconomic conditions, including a potential 25 basis point rate cut by the Federal Reserve in its next two meetings. This dovish monetary policy, combined with rising global liquidity and a weakening U.S. dollar, creates a favorable environment for risk assets like Bitcoin. The researchers noted that Bitcoin’s performance has historically aligned with these macroeconomic indicators, and the current conditions suggest continued strength in the near term.

The evolving DAT landscape also challenges firms to differentiate themselves in an increasingly competitive market. The scarcity premium enjoyed by early entrants has dissipated, and success now depends on strategic execution and risk management. For example, leading Ethereum-specific DATs control about 4.9 million ETH, valued at over $21.3 billion, representing more than 4% of the total circulating supply. This influence is reshaping market structures and liquidity patterns, with institutional products like ETFs playing a pivotal role in these changes.

As the PvP phase intensifies, the ability of firms to adapt and execute on their strategies will be crucial in determining long-term success. The DAT market is at a pivotal stage, and companies that can navigate the challenges of competition, regulatory scrutiny, and market volatility will likely emerge as leaders. In this environment, differentiation and disciplined execution are no longer optional but essential for survival.