Part 1: Welcome to the $115 Billion Puzzle Box

Here’s a fun game for your next corporate finance seminar: ask the room what the primary goal of a corporate treasury is. You’ll get a chorus of “capital preservation” and “liquidity management.” The stuff that ensures you can make payroll and keep the lights on, basically.

Then, ask them to explain a public company whose primary treasury strategy is to voluntarily convert its cash into one of the most famously volatile assets in human history, finance that purchase with convertible debt, and then watch its stock trade at a durable 80-100% premium to the value of those assets.

Welcome to the world of Digital Asset Treasuries (DATs), or DATCOs, if you prefer.

This isn’t a thought experiment. As of November 2025, this “fringe experiment” has ballooned into a market with over 200 publicly traded companies holding significant crypto positions, representing a collective $115 billion in digital assets. Which, we should note, has more than tripled from a mere $40 billion in late 2024, just to remind everyone what “capital preservation” doesn’t look like.

The puzzle isn’t just why companies are doing this. The real puzzle, the one we’re going to spend this series on, is why the market rewards some of these DATCOs with blistering 2x premiums to their net asset value (NAV) while sentencing others to wallow at 20-30% discounts.

What, exactly, are we all valuing when we value a Digital Asset Treasury? Is it the assets? Or is it the ability of the people holding the assets?

How We Got Here: A Brief, Weird History

This all started, as many modern financial curiosities do, with an eccentric CEO and a pandemic.

• 2020: The OG. Back in August 2020, MicroStrategy, an enterprise software company of no particular distinction, announced it was buying $250 million in Bitcoin. Not as a trade, but as its “primary treasury reserve asset.” This established the playbook: issue debt (cheaply, thanks to the Fed), buy Bitcoin, and tell the world your software business is now just the funding mechanism for a leveraged Bitcoin bet. Which, to be fair, seems to be a much better business.
• 2021: The Toolkit. The market for grown-ups got built. Institutional custody solutions from Coinbase, Anchorage, and Fireblocks reached a scale where a public company’s audit committee could plausibly sign off on not losing everything to a $5 wrench attack. This is the “find someone else to blame if it goes wrong” stage of financialization.
• 2022: The Stress Test. Crypto winter arrived, and it was brutal. This was the great memetic test: did you reallybelieve this was a long-term treasury asset, or were you just riding the line up?
• 2023: The “Product” Evolves. The Ethereum “Merge” (Sept 2022) and subsequent activation of staking withdrawals (April 2023) created a new animal: the yield-bearing DAT. Suddenly, the asset itself could produce a yield (currently ~3.0% APR), making it look slightly more like a financial instrument and less like a pet rock you just hope someone else buys for more.
• 2024-2025: The Institutional Nod. The January 2024 approval of spot Bitcoin ETFs in the US finally happened. This, paradoxically, didn’t kill the DATCOs. Instead, it legitimized Bitcoin as an asset class worthy of a 19b-4 filing, triggering a second wave of corporate adoption. The thinking being, “If BlackRock thinks it’s an asset, maybe our leveraged, expensive, fee-laden version of it is… also an asset?”

What Is a Digital Asset Treasury, Anyway?

At its simplest, a Digital Asset Treasury is a company (usually public) that holds digital assets—Bitcoin, Ethereum, DeFi positions—as its primary reserve instead of the usual boring stuff like T-bills.

This is the key distinction. A traditional CFO’s job is to ensure the company can make payroll in a downturn. A DATCO manager, by contrast, has made an explicit trade: they are swapping capital preservation for potential capital appreciation and yield generation. This is generally not what the “treasury” department does. It’s what the “speculative trading” department does, but “treasury” sounds more responsible.

As of today, that $115 billion in public DATs is roughly broken down like this (based on public estimates):

• Bitcoin: 68%
• Ethereum (mostly staked): 22%
• Other: 10%

You cannot value all DATs the same way. The market has already bifurcated into a menagerie:

• Type 1: The BTC-Only Pure Play. The OG. Its business model is… owning Bitcoin. And, one assumes, talking about owning Bitcoin.
• Type 2: The Yield-Bearing DAT. The “smarter” cousin. This DAT holds Ethereum or other yield-bearing assets and, crucially, stakes it to earn yield.
• Type 3: The Multi-Asset Diversified DAT. This is basically a publicly traded crypto hedge fund, but with worse liquidity and a fancier pitch deck.
• Type 4: The Structured & Leveraged DAT. The degen option. Actively trades options or uses derivatives to juice returns.
• Type 5: The Tokenized TradFi Bridge DAT. The new, “sensible” category, holding tokenized T-bills. This one is hilarious. It’s using revolutionary decentralized technology to… hold the most boring, centralized asset in existence. The circle is complete.

The Uncomfortable $115 Billion Question: Why?

If you can buy the BlackRock iShares Bitcoin Trust in your 401(k), why pay a 100% premium to own that exact same asset through a clunky corporate wrapper with a high-fee management team?

This is the central paradox of DATs. The bull case rests on a few pillars of friction, convenience, and perceived alpha:

• The 401(k) / IRA Wrapper (Fading): This was the big one. Many tax-advantaged accounts could buy stocks (like MSTR) but not spot crypto. With ETFs now IRA-eligible, this moat is drying up.
• Regulatory Arbitrage (Fading): Many institutional mandates are forbidden from holding “digital commodities” directly. But buying a CUSIP for a US-listed company? That’s just good, clean fun.
• Custody is Hard (and Scary): No seed phrases, no hardware wallets. This is the “I will pay 100% extra to not have to learn what a seed phrase is” convenience fee.
• Leverage Access: You can’t easily get the cheap convertible-debt leverage that DATCOs can. You’re buying a pre-built leveraged bet.
• Professional Management (The Yield Argument): You’re paying a premium for an expert team to navigate the complexities of staking and DeFi. The “they are smarter than me” premium, which is always the most expensive one.

This leads us to the core thesis of this series: the premium isn’t just about friction. It’s about ability. The market is paying a premium for a management team’s perceived ability to acquire, secure, manage, and deploy digital assets better than the investor could themselves.

In Part 2, we’ll build a rigorous valuation framework to answer the question: “What is a DATCO really worth?”