The stock price has slumped by 50%, and the purchase of coins has slowed down. How much longer can the DAT model hold on?

Original title: "Saylor model struggles as crypto treasury hype turns to doubt"

Written by: OLGA KHARIF, DAVID PAN, FORTUNECRYPTO

Compiled by: J1N, Techub News

The cryptocurrency asset treasury company (DATs) model inspired by Michael Saylor is facing severe challenges. These publicly listed companies, which primarily focus on purchasing cryptocurrencies, were originally seen as a favorable way for investors to engage in the cryptocurrency asset boom. However, they are now struggling amidst falling stock prices and dwindling market confidence. At the same time, complex financing instruments have increased operational risks, while stricter regulations and the requirement for shareholder approval for new stock issuances have further impacted their core financing model.

In fact, the current situation of Digital Asset Treasury (DAT) is not hard to foresee. The stock price has risen too quickly, the story has been exaggerated too much, and the financial logic has become increasingly "absurd". New companies that have emerged tend to do only one thing after going public: frantically buy cryptocurrency assets. Originally seen as a shortcut for investors to enter the crypto boom, now, with falling stock prices and shaken market confidence, the issue is no longer whether this model is under pressure, but rather in what way and to what extent it will gradually "burst the bubble."

Despite the broad rise in assets such as stocks and corporate bonds driven by the Federal Reserve's expected interest rate cuts, the stock prices of cryptocurrency asset management companies continued to decline, and token prices fell steadily. According to the data from 15 DATs tracked by Architect Partners, the average stock price dropped by 15% last week.

The individual stock performance has been even more severe. ALT5 Sigma Corp., which holds the WLFI tokens issued by Trump-related World Liberty Financial, has dropped about 50% in just over a week; Kindly MD Inc., a healthcare provider holding Bitcoin through its subsidiary Nakamoto Holdings, has seen a decline of 80% from its May peak. Other DATs related to Ethereum and Solana have also experienced significant drops, leading to a sharp decrease in the value of the tokens on paper.

Ed Chin, co-founder of Parataxis Capital, stated: "In the United States, there are too many companies of this kind, and the level of differentiation is very low."

More than 100 companies have now incorporated cryptocurrency into their balance sheets, most of which launched this year. Many small companies have completed their transformation in a short period of time, rebranding from Japanese nail salons, cannabis sellers to marketing agencies, and have quickly transitioned to buying coins, sparking a wave of "cryptocurrency asset treasury" in the market.

Nevertheless, the speculation frenzy has not completely subsided. Eightco Holdings Inc. saw its stock price soar over 3,000% in a single day after announcing it would buy Worldcoin and appointing Wall Street analyst Dan Ives to the board.

For some investors, this type of model remains attractive: using listed companies as a wrapper to provide exposure to cryptocurrency assets in the form of stocks, while also allowing for leverage. However, this "crowded trade" is gradually eroding investor confidence. Many companies have little business beyond holding tokens, and as stock prices decline, the confidence supporting the premium is also wavering. Industry pioneers like Strategy and well-known DAT companies such as Japan's Metaplanet Inc. have also seen significant declines in their stock prices recently, indicating that even market leaders find it difficult to withstand the impact of shifting sentiment.

The data also reflects signs of decline in this model. CryptoQuant data shows that in August, treasury companies purchased only 14,800 bitcoins, a significant drop from 66,000 in June. At the same time, the average purchase size has also noticeably shrunk, decreasing by 86% from the peak period in 2025 to only 343 bitcoins last month. The accumulation growth rate of treasury companies' bitcoin holdings has also plummeted from 163% in March to 8% in August.

To obtain more funds for purchasing cryptocurrencies, DATs have begun adopting more complex financing strategies. Crypto lending institutions, brokers, and derivatives trading desks have built a specialized financing ecosystem to serve treasury companies, including tools such as Bitcoin collateral loans, token-linked convertible bonds, and structured payments.

For example, the London web design company Smarter Web issued bonds linked to the value of Bitcoin rather than the pound, which means that when Bitcoin rises, the company's debt will also increase. CEO Andrew Webley stated that he believes the bonds only account for 5% of the company's treasury, and the risks are manageable, but such innovative financial instruments actually add new risks on top of the volatility of the underlying assets.

Another company originally engaged in catering, DDC Enterprise Ltd., raised over $1 billion through complex debt, equity quotas, and shelf offerings, but its stock price quickly fell back after a sharp surge.

At the same time, Nasdaq has begun requiring some token-holding companies to obtain shareholder approval before issuing new shares to raise funds for token purchases. And "selling shares to buy tokens" is precisely the core financing method of DAT.

Strategy and Japan's Metaplanet Inc. are the most well-known DATs, with stock prices skyrocketing in the past year. Recently, the stock prices have also declined, indicating that even the leaders cannot withstand the shift in market sentiment. The industry is even discussing mergers and acquisitions, and the strong may directly acquire the token assets of the weak.

The strategy was knocked out during last Friday's adjustment of the S&P 500 index, despite meeting the criteria. Since April, the stock price has been relatively stagnant, and even with the rebound of Bitcoin, its Bitcoin market value multiple (mNAV) has dropped to around 1.5. The company recently raised only $217 million in Bitcoin through ATM financing, which is below market expectations.

On the other hand, crypto lending institutions are accelerating their布局. Two Prime CEO Alexander Blume stated that DAT has become one of the main customer groups for Bitcoin collateral loans, with individual loan amounts typically ranging from $10 million to $500 million, and the current active loan scale has reached $1.25 billion. The company has also launched a new structure of "one-time repayment at maturity," eliminating monthly interest payments to give borrowers more room in volatile markets.

Blume stated: "The Bitcoin treasury company is the focus of our business growth," "Over the past year, we have witnessed an increasing demand for financing."

As for how far this financing ecosystem can go, there is currently no conclusion. However, it can be anticipated that there may not be a sudden collapse, but rather a "chronic decline" characterized by a gradual drop in stock prices and a stagnation in coin purchases.

Some investors have begun to question: why hold cryptocurrency assets indirectly through companies that impose layered fees, risks, and equity dilution, rather than buying coins directly or through ETFs? Travis Kling, Chief Investment Officer of Ikigai Asset Management, has expressed skepticism about the entire model, stating: "I have been trying to convince myself to buy some DAT, but have not succeeded, and probably never will." He believes this model "is like the last gasp of a cycle, unable to think of anything more absurd than this practice."