“What makes a DAT stand out is its ability to withstand market volatility and retain investor confidence.” | Image credit: Veronica Cestari / CCN
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Key Takeaways
Passive Bitcoin treasury strategies no longer work in volatile markets, as falling prices expose weak balance sheets and reduce access to capital.
Declining asset valuations and tightening financing conditions have made it harder for Digital Asset Treasuries (DATs) to sustain operations without stable revenue.
Long-term survival depends on building recurring income, strong capital discipline, and operational structures that go beyond token accumulation.
Bear markets will remove weak players, while DATs with sustainable revenue models and effective risk management will retain investor confidence and survive.
Passive Bitcoin holdings are dead capital and without active treasury strategies, HODL’rs will fail.
Digital Asset Treasuries (DATs) were the ultimate meta-narrative in 2025 during the crypto bull market. Almost every other company was adding crypto to its balance sheets and profiting from rising digital asset prices through a simple buy-and-hold strategy.
The passive treasury strategy playbook worked until it didn’t.
Market volatility returned in 2026, and most DATs are now facing significant paper losses worth billions of dollars.
Bear markets have become a litmus test for DATs. Companies, especially those that primarily buy and hold crypto to book profits, won’t survive the harsh winters.
Instead, DATs must focus on revenue-generating activities to sustainably create value for shareholders, even when asset prices keep falling.
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Crypto Market Losses Expose Structural Weaknesses in Dat Balance Sheets
The recent slump in crypto prices had a cascading effect on DATs. Strategy, the Bitcoin-based DAT has recorded an unrealized paper loss worth $9.2 billion, while BitMine Immersion Technologies has suffered a loss of $8.4 billion on its Ethereum purchase.
According to the blockchain analytics firm Artemis, DATs have collectively suffered losses of over $25 billion. Except for Hyperliquid Strategies, none of the DATs hold crypto above their average cost basis, raising concerns about sustainability and long-term liquidity financing.
Although the losses are unrealized, the cumulatively negative P&L data show signs of weakening balance sheets and equity valuation.
Evidently, the markets have completely transformed from rewarding digital asset accumulation to now pricing survival risk.
If falling crypto prices converge with leverage, debt maturities, and bleeding cash reserves, external financing-dependent DATs will face further vulnerability.
With lenders introducing stricter borrowing terms and equity markets not providing adequate capital, refinancing will remain a challenge.
Falling Asset Valuations Signal Weakening Investor Confidence and Reduced Capital Access
Falling market net asset value (mNAV) has become another stress signal for the DAT sector. Most DATs are trading below an mNAV of 1, indicating how markets are currently valuing company equities at a discount to the assets they’re holding.
Consequently, buy-and-hold DATs cannot raise capital through equity issuance without diluting their value, limiting capital accessibility.
Companies like Strategy have started considering shifting from equity capital to preferred capital through Stretch (STRC), the company’s perpetual preferred stock.
STRC is Strategy’s fourth perpetual preferred offering to finance Bitcoin purchases, offering an alternative to new share issuance that dilutes stock prices.
However, with Strategy’s current mNAV at 0.89, the problem is more structural.
Leverage, Debt Exposure, and Liquidity Risks Threaten DAT Survival
Declining mNAVs demonstrate how most buy-and-hold DATs were priced for appreciation during the bull market.
Now that the market sentiment has dimmed and prices are falling, mNAVs are collapsing too. The fall of mNAVs could trigger DATs to sell their digital asset holdings, leading to aggravated market volatility.
The risk of a DAT going bankrupt or being forced to sell crypto depends on the company’s debt structure and the credit spread of its bonds.
Beyond financial technicalities, DATs must ensure their exposure to crypto doesn’t affect shareholder value.
If DATs have to survive the bear markets, they must create long-term value for investors. And sustainable value will come from revenue-generating activities.
“DATs must adopt new business models beyond buy-and-hold strategies to maintain a sustainable mNAV premium that remains above 1 during bear markets.” | Image source: Wojciech Kaszycki
Revenue Generation Is the Only Sustainable Path for DATs
The stock performance of DATs is closely linked with daily market movements in token prices, leading to high volatility.
If DATs have to create value for shareholders, they must provide a sustainable mNAV premium.
Such long-term value will come from robust stock issuance discipline, capital restructuring, sustainable cash flow, and operational execution.
DATs face equity devaluation due to their capital mismanagement and high-risk exposure. To protect investors, DATs must restore trust in the company’s balance sheet by preventing stock dilution and reactive financing plans.
What makes a DAT stand out is its ability to withstand market volatility and retain investor confidence.
A strong DAT usually shouldn’t just accumulate a digital asset out of mere conviction in its price appreciation.
Instead, accumulation must be paired with a solid internal company architecture that includes recurring revenue for long-term, predictable financing and aligning with pro-profit governance.
Consistency in revenue figures, coupled with profitability and efficient capital management, is fundamental for DATs to weather the harsh crypto winter.
Ultimately, the goal should be to create a balance sheet where earnings are more than spending, thereby ensuring shareholder returns never face dilution.
Bear Markets Will Eliminate Weak Dats and Reward Disciplined Operators
The ongoing bear market cycle is a cleaning drive that will lead to weak players winding down their business. Those with strong capitalization, proper risk management, and operational discipline will survive.
Although the broader industry understanding is that larger DATs will automatically survive due to their deep liquidity reserves, that’s not the case. Rather, the capability to create sustainable value instead of buying and holding the underlying token is key to sustenance.
The philosopher George Santayana said, “Those who cannot remember the past are condemned to repeat it”.
History is already replete with examples of how big companies like Lehman Brothers, Bear Stearns, and AIG collapsed in 2008 due to excessive leverage and unprotected exposure to volatile markets.
Most existing DATs have the same structural stress points, as they lack cash flows or operational revenue and instead rely on crypto prices only.
With crypto markets extremely volatile, a major price change can cause DATs to collapse like a house of cards.
DATs must adopt new business models beyond buy-and-hold strategies to maintain a sustainable mNAV premium that remains above 1 during bear markets.
To do so, DATs have to get engaged in supporting the underlying token’s ecosystem and investing in developing more revenue sources.
Unless DATs rectify their structural weakness, they won’t be able to survive till the next bull cycle.
Disclaimer:
The views, thoughts, and opinions expressed in the article belong solely to the author, and not necessarily to CCN, its management, employees, or affiliates. This content is for informational purposes only and should not be considered professional advice.
About the Author
Wojciech Kaszycki
Wojciech Kaszycki, CSO of BTCS SA, boasts 30+ years of experience as a serial entrepreneur, executive, founder, and leader across IT, Financial Markets, e-commerce, and retail sectors.
Wojciech offers a unique blend of strategic sales skills and in-depth business understanding. This combination equips him to solve complex problems for organizations, guiding them toward growth and profitability. His belief in the transformative power of blockchain technology is rooted in its potential to create transparent, decentralized, and efficient systems.
