DAT Companies Feel the Pinch as Bitcoin Prices Plummet

Strategy, a company that has been stockpiling Bitcoin, has again drawn attention to a group of publicly traded companies known as digital asset treasuries (DATs). These companies have been struggling with falling token prices and reduced investor interest.

Following its plan announced in late June, Strategy authorized up to $1.25 billion in Bitcoin sales, which briefly boosted its shares on Friday. The company has already sold approximately $218 million worth of Bitcoin this year to fund dividends and replenish its US dollar reserves.

The sale has raised questions about the viability of DATs, which boomed last year due to market exuberance over President Trump's crypto-friendly policies but have since struggled with falling token prices. The business model of DATs is highly sensitive to decreasing token values, which can erode the value of their holdings and undermine leveraged returns.

As Bitcoin has declined by as much as 33% this year due to geopolitical tensions, surging oil prices, and a Federal Reserve revamp under new chair Kevin Warsh, DAT companies have also seen their fortunes decline. Their market capitalization peaked in July last year but hit a trough in November after global trade fears sparked a record $19 billion liquidation of crypto positions.