For a brief moment, the digital asset treasury (DAT) was Wall Street’s bright, shiny object.
But in 2026, the novelty has worn off.
The star of the “passive accumulator” has been dimmed, and rightly so. Investors have realized that simply announcing a bitcoin purchase is no longer a magic trick that guarantees stock value appreciation. The easy money trade is over.
But this cooling off period is not a death knell; it is an accounting. It strips away the hype to reveal a stark reality: Dozens of public operating companies are trying to transform themselves into unregulated hedge funds—often without the risk architecture of a fund or the governance standards of a public company.
The playbook was alarmingly simple: raise capital, accumulate cryptocurrency and ask for appreciation.
But as a securities attorney and CEO who has overseen more than $5 billion in capital raisings, including as general counsel for MARA Holdings during its run to a $6 billion valuation, I know that accumulation is not a sound business strategy. It’s a piece of shit. And as we approach the annual reporting deadlines, the bill for those bets is due.
If the DAT sector is to mature from a speculative frenzy and gain credibility as a respected fintech strategy, we must stop treating governance as an afterthought. That must be the foundation.
The risk of the “blind buy”
The prevailing DAT model has been defined by a singular mandate: raise cash, buy assets, hold. While this works in a bull market, it exposes shareholders to catastrophic disadvantage in a bear market or during periods of volatility like we’ve all seen recently.
Without a clear, articulated strategy for why a specific asset is chosen or how liquidity will be managed, these companies are essentially gambling with shareholder value. Both private and institutional investors are starting to ask tougher questions. They are no longer satisfied with “we believe in crypto.” They want to know: How do you balance capital allocation? What are the specific risks of the protocol you are invested in and what are you doing about risk mitigation? If the current strategy stalls, do you have a plan B?
A fair number of periodic reports submitted by DATs today appear to offer generic risk factors. They tend to repeat warnings about volatility and hacking, but fail to address the idiosyncratic risks of their specific treasury assets. This is where the new generation of DATs will need to differentiate themselves to survive and be competitive.
Using the annual report as a storytelling tool
As reporting deadlines loom, management and advisors at DATs need to renew their applications. For example, the risk factor section of a 10-K should not be a representation of every risk factor that has appeared on EDGAR, the SEC’s primary digital database; it should be a thoughtful assessment of realistic short- and long-term risks that specifically addresses the issuer’s business.
A mature DAT must move beyond the basics and explain the trade-offs transparently. Investors deserve to know why a dollar is going into AVAX (or BTC) versus R&D or marketing, and exactly how the company is generating solid revenue streams outside of appreciation to keep the lights on during a crypto winter. Furthermore, companies must disclose the specific safeguards and controls they have in place to prevent the treasury from becoming a single failure.
“The Governance Alpha”
The next wave of successful DATs will be defined by their control architectures. This is not just about compliance with the law; it is about the trust of the shareholders and the fulfillment of the fiduciary duty.
We recently navigated this on AVAX One. We recognized the inadequacy of simply announcing a pivot to a DAT model, which meant going to our shareholders – the true owners of the capital – and asking for explicit approval of our digital asset strategy.
The result was telling. Over 96% of the shareholders entitled to vote approved the move. This wasn’t just a vote for another crypto treasury. It was a mandated vote for a governance strategy for crypto.
It gave us a license to operate that “blind buy” DATs simply don’t have, and we intend to use that mandate to support fintech using the Avalanche ecosystem.
The regulatory shield
Finally, we cannot ignore the SEC and the broader regulatory landscape. While many in the industry see regulation as an obstacle, for a public DAT it is a necessary and welcome shield.
SEC disclosure obligations enforce a level of transparency that protects shareholders from the worst excesses of the crypto market. It is a powerful tool that allows public DATs to differentiate themselves from opaque private entities.
By embracing these commitments rather than doing the bare minimum to scrape by, we build a moat of credibility and provide verifiable behavior and security.
We are entering a new phase. The “wild west” days of financial management are coming to an end. The market will soon punish those who merely collect coins and reward those who build durable, managed financial fortresses.
Your annual report is your final term paper and market reaction is your report. Make sure you’ve done your homework.
