Key capital market trends: Digital asset treasuries

US public companies increasingly embrace digital assets as part of their corporate treasury strategies. Known as digital asset treasury (DAT) companies, these public companies, at the core of their revamped business model, pursue long-term accumulation of significant reserves of digital assets while employing sophisticated, yield-enhancing trading strategies.

DATs have raised significant capital through a range of equity and equity-linked instruments, including public and private offerings, de-SPAC transactions, and reverse mergers, in order to actively acquire Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and other alternative digital assets as reserve treasury holdings.

This trend represents a notable transformation in corporate treasury management, blurring lines between traditional finance and the broader digital asset ecosystem.

Why institutional investors are investing in digital assets

Institutional investors and other asset managers are purchasing DAT equities to achieve compliance, diversification, and strategic exposure to emerging financial infrastructure. As many institutions face compliance and operational barriers that prevent direct digital asset holding, DATs serve as an indirect means to obtain exposure to digital assets by buying publicly listed equities. Funds may also participate in capturing the arbitrage opportunities arising from persistent dislocations between the value of the underlying digital asset and the market price of the DAT equity.

Additionally, recent regulatory developments in digital assets may have reduced perceived risk, increased legal clarity, and accelerated institutional adoption. This regulatory clarity, combined with stablecoin legislation passed in July 2025, has strengthened confidence that digital assets will become embedded in mainstream financial infrastructure and the transactional rails of tomorrow’s financial system.

Further, the emergence of multiple sophisticated, institutional-grade vendors – including custodians, prime brokers, and technology companies – has helped mitigate counterparty and settlement risk. Macroeconomic factors, such as rising sovereign debt levels, have also contributed to the perception of digital assets as both an inflation hedge and portfolio diversifier. These factors, among others, have contributed to the significant growth of DATs.

A watershed moment for DAT companies

While DAT strategies are not new for US public companies, the recent velocity of capital deployment in DAT investments has been notable. In 2021, fewer than ten companies held BTC in their treasuries. As of September 2025, more than 200 companies reported having adopted DAT strategies, with more than 190 companies focused on BTC treasuries, and another 10 to 20 companies focused on alternative digital assets. Collectively, these companies are estimated to hold over $115 billion in digital assets. The market capitalization of DATs has increased more than threefold to approximately $150 billion in September 2025, compared to $40 billion in September 2024.

Strategic deployment of capital markets tools

A broad range of capital market tools is being leveraged to financially engineer DAT strategies, including at-the-market (ATM) offerings, private investments in public equity (PIPE), equity lines of credit (ELOC), convertible notes, warrants, preferred equities, de-SPACs, reverse mergers, and innovative credit facilities linked to staking yields and/or treasury performance.

ATM programs, which allow control over the timing of sales with minimal market impact, enable DATs to target sales when shares are trading at a premium to the treasury token’s net asset value and pause sales when market conditions are not favorable. PIPEs have gained traction among newly public or smaller companies looking to efficiently raise capital for digital asset reserves.

Convertible notes, coupled with derivative structures to help mitigate dilution, have also become attractive instruments, especially for high-growth companies seeking to rapidly scale their digital asset reserves. High demand for DATs in the convertible bond market has recently allowed such companies to negotiate favorable terms, such as zero-interest coupons and high conversion premiums. Companies announcing DAT strategies alongside capital raises have experienced significant stock movement.

The momentum in strategically deploying capital-raising tools for financial engineering is expected to continue throughout 2025.

Trading strategies

DATs’ investment strategies have evolved since the “buy-and-hold” strategy first introduced to the market in 2020. Depending on mandate and governance, some DATs outsource treasury portfolio management to external managers, while others build internal trading infrastructure.

Current treasury strategies are designed to optimize yield through the use of various products, such as staking, liquid staking, derivatives, lending, basis trades, option overlays, and yield farming within decentralized finance environments. Some strategies may also include operating validators in-house.

DAT strategies are increasingly being employed across a broader digital asset class, including BNB, XRP, HYPE, and SUI. If some of these tokens are later determined to be securities under US federal securities laws, the rapid growth of DATs may drive the market toward more diversified pools of digital asset treasuries. As DATs expand beyond passive strategies and adopt more complex trading instruments, the demands related to operations, risk management, human capital, and vendor retention rise significantly.

DATs may consider investing in robust risk management systems and experienced management teams with crypto-specific investment experience. Establishing formalized trading relationships with sophisticated market-makers, prime brokers, over-the-counter desks, liquidity providers, custodians, and derivatives counterparties – as well as comprehensive documentation – are key for effective risk management and internal controls.

DATs also require valuation, reconciliation, and settlement operational systems to ensure transparent valuation. Implementing these strategies requires experienced back-office and compliance officers, internal audit functions, and appropriate legal guidance.

Corporate governance

A rigorous corporate governance framework may help mitigate regulatory and financial risks while meeting investor expectations. As companies adopt DAT strategies, many are adding directors with digital asset finance experience to their boards. Boards are now expected to formally approve digital asset accumulation and related investment policies, including permissible coins, custody arrangements, allocation, limits on allocations, and asset liquidation rules.

As public companies, DATs are expected to focus on robust internal controls, accounting, and disclosure standards. Financial Accounting Standards Board rules now require fair-value accounting for digital assets. Transparent and robust disclosures of digital asset holdings, valuations, and impairment methodologies may help reassure investors and analysts regarding the reliability of the financial reporting.

Companies should consider careful assessment of any related party transactions, potential conflicts of interest, and insider trading considerations, especially when entering into material contracts with:

• Entities that are affiliated with, or are controlled by, new board members or management teams
• Affiliated asset managers and strategic advisors, with structuring board oversight
• Affiliates holding equity or equity-linked securities, especially when in possession of material non-public information

Careful consideration of trading decisions involving underlying digital assets is also key when in possession of material non-public information, as the stock price may have direct exposure to the price volatility of the digital asset.

Recent regulatory developments in the public markets for digital assets

The rapid increase in DATs is attributed in part to a favorable regulatory environment. On August 5, 2025, the Securities and Exchange Commission (SEC) issued a Statement on Certain Liquid Staking Activities, clarifying that it does not view liquid staking activities as involving the offer and sale of securities requiring registration under the US federal securities laws. This has lowered regulatory hurdles for DAT strategies involving proof-of-stake mechanisms, commonly used by ETH or SOL-based treasury strategies.

The SEC’s statement is part of a broader initiative by the current US administration to promote the development of blockchain innovation and digital asset technologies. These initiatives include President Donald Trump’s January Executive Order titled, “Strengthening American Leadership in Digital Financial Technology,” the establishment of a Crypto Task Force by the SEC, a comprehensive report on digital assets published by the President’s Working Group on Digital Asset Markets, and the announcement of Project Crypto by SEC Chair Paul Atkins on July 31, 2025. Project Crypto outlines the SEC’s strategic initiative to modernize current US securities laws and establish a regulatory framework to foster capital formation in the digital assets markets.

The SEC’s September 4, 2025 Regulatory Flexibility Agenda included recommendations for several proposed rules related to crypto assets. These proposals addressed areas such as their offer and sale (including exemptions and safe harbors), custody, use of distributed ledger technology by transfer agents, broker-dealer responsibilities and record-keeping, and trading on alternative trading systems and national securities exchanges. If adopted, the proposed rules could help clarify the regulatory framework for such assets and provide clarity to participants in the crypto assets market. The proposed rules are anticipated to be introduced by April 2026.

The Commodity Futures Trading Commission (CFTC) also announced that it will launch a “crypto sprint” to implement recommendations from the President’s Working Group on Digital Asset Markets, and will work closely with the SEC on Project Crypto.

As noted in SEC Chair Atkins’ remarks at the September 29, 2025 SEC–CFTC Joint Roundtable on Regulatory Harmonization Efforts, "[SEC and CFTC] must work in lockstep to transform dual regulation from a source of confusion into a source of strength, collaborating to provide regulatory clarify and end [regulatory fragmentation]," as necessary steps in supporting US leadership in the digital age.

Looking ahead

With the focus on establishing a modernized regulatory framework for digital assets and the recent proliferation of DATs, the SEC is closely reviewing public disclosures to ensure that adequate information is available for investor protection, while fostering capital formation in the digital asset markets.

The SEC has recently issued several comment letters requesting DATs to provide more comprehensive descriptions of their DAT strategy, including digital assets use, plans for staking and other activities for yield generation, value to shareholders, accounting treatment of digital assets, use of custodians, storage of digital assets, and applicable regulations.

Long-term US policy toward digital assets will continue to evolve, and it remains to be seen how compliance costs and overall legal risks will develop for companies exposed to DAT strategies.

Learn more

For more information, please contact the authors.