Bitcoin Digital Asset Treasury (DAT) companies have been making headlines in recent weeks, and often for the wrong reasons.
A sharp decline in the crypto markets and over 40% drop (as of November 27) in the share price of the world’s largest corporate owner of bitcoin, Strategy (MSTR), this year has led some to question the sustainability of these companies.
The strategy’s steep underperformance against bitcoin (down about 2% this year) in recent months may be due to looming index inclusion risk rather than crypto market dynamics, according to Wall Street bank JPMorgan. However, the decline in the share price of MSTR and other bitcoin DATs still raises the question: Is bitcoin’s digital asset treasury model broken?
According to Elliot Chun, managing partner at the investment bank Architect Partners, it is the opposite.
“This is the most exciting period for BTC DATs yet because we are seeing and will see in real time which DATs will be able to successfully maneuver and communicate through this first ‘macro’ price move lower,” Chun said in an interview with CoinDesk.
“We’re still so early that as an industry we haven’t even properly categorized the DAT category yet, so it’s impossible to tell if the model is broken,” he added.
More than 700% return
Chun divides the bitcoin DAT landscape into four broad groups that are now unfolding in real time.
“Pure play” DATs, which direct almost all of the company’s resources towards maximizing a bitcoin-denominated result, often BTC per share. “Produce” DATs that actually generate bitcoin through operations like mining. “Hybrid” DATs that treat the crypto as a primary pillar but still run non-BTC initiatives, and “Participating” DATs that simply keep the digital asset on their balance sheet and leverage it as a capital market tool.
As these categories experiment publicly, failure is inevitable, but according to Chun, that’s standard for any new business or capital market model.
What all bitcoin DATs ultimately need to address, Chun notes, is revenue: how to generate dividends or cash flow, whether denominated in BTC or otherwise. And not everyone will make it.
He expects that within five years, half of today’s purebred, producer and hybrid DATs will disappear through failure, delisting, mergers or acquisitions.
About 35% will survive without outperforming, 10% will beat major market indexes like the S&P 500, and the top 5% could challenge the Magnificent Seven’s decade-long run, returning more than 700% between 2025 and 2034, Chun said.
Can these companies withstand a true downturn? It depends on how you define ‘serious’. If the recent pullback counts, Chun expects most DATs to pull through. The real test will be deeper macro stress, where operational clarity, Treasury discipline and a credible plan will separate survivors from targets.
1 million dollar bitcoin
So what’s next for this industry? Like any other industry that skyrockets during a bull run and begins to crumble during a downturn, it is consolidation.
The companies that blend TradFi discipline with bitcoin-native understanding will create messages that resonate with investors and position themselves to raise and deploy capital efficiently. And those that can’t will be acquired, often by other DATs, Chun said.
Longer term, he expects the strongest performers to become acquisition targets for the world’s largest public companies as the bitcoin price marches toward $1 million and corporate treasuries increasingly view BTC as a strategic, rather than speculative, asset.
Read more: Bitcoin’s $1T Route Reveals Fragile Market Structure, Deutsche Bank Says
