By Harshit, NEW YORK, NOV. 10 / 9 AM EDT
As enthusiasm for bitcoin cools and market saturation squeezes returns, a new wave of digital asset treasury (DAT) companies is shifting toward smaller, more volatile cryptocurrencies in pursuit of higher profits — a move analysts warn could amplify risks across both crypto and equity markets.
These publicly traded firms, often modeled after Michael Saylor’s Strategy (MSTR), stockpile digital assets on their balance sheets, betting that crypto appreciation will deliver outsized returns. But with bitcoin prices sliding and investor sentiment weakening, many are now pivoting to lesser-known altcoins such as BERA, NEAR, and Canton Coin, spurring concerns of a coming wave of volatility.
Crypto Companies Multiply Amid Trump’s Friendly Stance
According to a report by law firm DLA Piper, there were at least 200 digital asset treasury firms worldwide as of September — up more than threefold from a year earlier — with a combined market capitalization of about $150 billion. The surge coincides with U.S. President Donald Trump’s crypto-friendly policies, which have encouraged publicly listed firms to hold digital assets as a financial reserve or speculative investment.
“Like in the early days of the internet, companies are piling in,” said Cristiano Ventricelli, vice president and senior analyst of digital assets at Moody’s Ratings. “But DATs are expanding toward more exotic and less liquid cryptocurrencies — and that’s exactly where the risk could be much higher.”
In recent weeks, smaller firms such as Greenlane (GNLN.O), OceanPal (OP.O), and Tharimmune (THAR.O) have announced new holdings in emerging coins rather than traditional ones like bitcoin or ether. Analysts say this marks a broader shift away from blue-chip crypto holdings amid shrinking returns.
Volatility Rises as Financing Tactics Shift
Since April, many of these companies have financed token purchases through private placements or PIPEs (private investments in public equity), raising quick capital by selling shares directly to private investors at a discount.
A Reuters analysis found that at least 40 DATs raised over $15 billion via PIPEs between April and November, with only five of those focused primarily on bitcoin. The financing strategy offers easy liquidity but exposes firms to shareholder dilution and price swings when lockup periods expire.
The fragility of the model was evident on October 10, when markets slumped on renewed U.S.-China tariff tensions. BitMine, which holds ether, dropped 11%, Forward Industries — a Solana investor — fell 15%, and Strategy lost nearly 5%, illustrating how equity volatility mirrors crypto’s instability.
“The hype has deflated since the first DAT boom,” said Peter Chung, research head at Presto Research. “But given Trump’s continued support for digital assets, it could come roaring back.”
Institutional Players and Concentration Risks
Major institutional investors — including Winklevoss Capital, Galaxy Digital, Jump Crypto, Pantera Capital, and Kraken — have backed several of these treasury deals, according to public filings. Their participation lends legitimacy to DATs but also links traditional finance more tightly to crypto price swings.
Standard Chartered analysts estimate that DAT firms collectively control about 4% of all bitcoin, 3.1% of ether, and 0.8% of solana. Such concentrated holdings mean their liquidation or distress could reverberate through the broader crypto market.
“DATs are now part of the volatility pipeline,” Ventricelli said. “When crypto prices drop, equity values plunge — and that can trigger margin calls and secondary share sales, worsening the downturn.”
Discounted Valuations and Investor Losses
Earlier this year, many DAT companies traded at a premium to their net crypto holdings, fueled by expectations they would use leverage or credit access to expand. Now, that optimism has faded.
At least 15 bitcoin-holding firms are trading below net asset value, according to The Block, signaling waning confidence.
10x Research estimated that retail investors — major backers of Strategy and similar DATs — have lost roughly $17 billion collectively in these trades since the year began.
Some companies are now responding with share repurchases to support valuations. ETHZilla and Forward Industries recently announced buyback programs, citing undervaluation compared to their digital assets.
“I think most of these companies will end up trading at a discount to their holdings,” said Michael O’Rourke, chief market strategist at JonesTrading. “Investors are realizing that these firms are not pure crypto plays — they’re leveraged bets with management and financing risk attached.”
Survival of the Smartest
Still, executives at leading DATs remain optimistic. Kyle Samani, chairman of Forward Industries and co-founder of Multicoin Capital, said the firm’s buyback “provides flexibility to return capital when shares trade below intrinsic value.”
Others, like SUI Group (SUIG.O), which stockpiles the Sui token, are diversifying their operations by launching stablecoins and blockchain products. “If a DAT just sits back and only buys tokens, long term, you’re going to get absolutely decimated,” said Chairman Marius Barnett.
As the crypto-equity hybrid sector matures, analysts expect consolidation and higher regulatory scrutiny. For now, the proliferation of small, risk-heavy players underscores how speculative fervor — and the quest for quick profits — continues to shape the post-bitcoin digital asset landscape.