Introduction

A new class of public companies is emerging with a singular focus: accumulating cryptocurrency as a core treasury asset. These Digital Asset Treasury Companies (DATCOs) raise capital through traditional markets and deploy it directly into digital assets.

What began as an unconventional balance sheet experiment is now a multi-billion-dollar trend spanning Bitcoin, Ethereum, and a growing list of altcoins; reshaping market dynamics, tightening supply, and giving investors new ways to gain crypto exposure.

The concept might feel new, but the logic is familiar. Just as corporations once stockpiled gold to hedge against inflation and currency debasement, today’s DATCOs are positioning digital assets as the next strategic reserve. They borrow tactics from both corporate finance and crypto-native strategies, creating a hybrid model that’s as innovative as it is controversial.

The Digital Asset Treasury Companies (DATCO) Formula

Bitcoin paved the way for corporate crypto treasuries. The turning point came in 2020, when Michael Saylor’s MicroStrategy began converting cash reserves into BTC. At the time, it was a bold departure from tradition: corporate treasuries have typically favored safe, liquid assets such as cash, bonds, or short-term securities. Bitcoin, with its volatility and regulatory uncertainty, sat firmly outside that comfort zone.

Yet the gamble reshaped the landscape. Today, around 115 institutions across 29 countries collectively hold nearly 1.5 million BTC, valued at more than $167 billion. This represents roughly 7.1% of Bitcoin’s total supply, underscoring the growing role of corporate and institutional treasuries in the market. But the distribution is far from equal. According to Coingecko's Bitcoin Treasury Holdings data, MicroStrategy alone controls about 63.2% of all Bitcoin owned by public companies, a position that dwarfs every other corporate holder. This imbalance is captured in the chart below, which ranks the top 10 public companies by Bitcoin holdings and highlights MicroStrategy’s dominance.

Source: CoinGecko

DATCOs don’t just buy Bitcoin with excess profits. They raise capital through share offerings, bonds, or convertible notes. They then deploy those funds directly into crypto. Because these companies often trade at a premium to their net asset value (NAV), essentially, the market value of the coins they hold, they can issue shares above NAV and use the proceeds to buy more BTC. This “NAV arbitrage” increases the BTC per share for existing investors.

If that sounds abstract, think of it like this: if a company’s stock price is trading higher than the actual value of its Bitcoin holdings, issuing new shares brings in more cash than the Bitcoin they’d otherwise need to sell to match that value. They use that cash to buy more Bitcoin, so every shareholder ends up owning a bigger slice of the total BTC pie.

The attraction for institutional investors is clear. Many are restricted from buying spot Bitcoin or ETFs due to compliance rules. Owning stock in a publicly traded Bitcoin treasury company offers a compliant workaround. Before gold ETFs existed, gold miners played a similar role for investors seeking exposure to the precious metal.

Source: Keyrock

Some DATCOs have become so aggressive that their purchases visibly move markets. While most corporate buys contribute modestly to daily price changes, Keyrock research shows that Strategy’s largest acquisitions have coincided with multi-percent intraday jumps. In late 2024, one of its billion-dollar buying sprees was credited with helping push Bitcoin to new all-time highs. According to Keyrock, most small Treasury purchases only contributed to 0.59% of daily price impact on average. But some of the big Strategy purchases do impact the market heavily. Just before EOY 24’, they'd contributed ~9.05% to price impact.

Looking ahead, it’s not just companies but also jurisdictions that matter. A view of Bitcoin holdings by country further illustrates where this concentration lies, with the US far ahead of other regions.

Source: BitcoinTreasuries.Net

This geographic tilt highlights how regulation, governance, and market access will shape the next chapter of DATCO strategies.

Ethereum and the New Wave of Altcoin Treasuries

If Bitcoin proved the model works, Ethereum is showing how it can evolve. Unlike Bitcoin, Ethereum offers more than blue-chip status: it’s a yield-bearing asset through staking. By locking ETH into the network, holders earn additional ETH over time while simultaneously helping to secure the blockchain. For a corporate treasury, that’s a compelling combination…a hard asset that also generates income.

Just a year ago, corporate ETH holdings were barely on the radar. Today, 11 companies collectively hold over 3 million ETH, valued at more than $14.5 billion. Two names dominate this shift.

• BitMine Immersion shocked the market by acquiring 1.72M ETH (~$7+B) in just over a month. Almost all of it is staked, generating steady rewards, positioning the firm as the largest corporate holder of ETH. And as of recently, the company filed to sell up to $24.5 billion worth of stock in order to fund more Ethereum purchases.

• SharpLink Gaming follows a similar playbook. As of August 31, 2025, it holds 837,230 ETH (~$3.7+B), funding its accumulation through at-the-market share sales and reporting performance in terms of “ETH per share”.

Both companies are essentially applying the Bitcoin treasury playbook to Ethereum, but with the added compounding effect of staking rewards. This means that even without new capital raises, their holdings can grow organically over time.

The momentum is spreading. FG Nexus has filed to raise up to $5B for an ETH-focused treasury, signaling continued appetite. The speed of accumulation is striking: in some cases, these companies have bought more ETH in weeks than the Ethereum Foundation itself holds.

Ethereum’s success has also opened the door to other blockchains. Solana has attracted firms like Upexi and DeFi Development Corp, which together hold close to 4 million worth of SOL. Upexi even secured a $500M credit line specifically for Solana purchases. The expansion doesn’t stop there. In Chainlink’s case, real estate asset manager Caliber invested $40M into LINK, a move that drove its stock up nearly 80%. Litecoin gained its first corporate backer in MEI Pharma, which bought nearly a million LTC. The deal came with advice from Litecoin creator Charlie Lee himself, underscoring the legitimacy play. Even Dogecoin has entered the corporate treasury arena: backed by the Dogecoin Foundation and House of Doge, CleanCore committed $175M and by doing so becoming the first public company to adopt DOGE, a meme, as a strategic asset. The announcement, however, shocked markets and sent CleanCore’s shares tumbling 52%.

Newer blockchains are also in the mix. Mill City Ventures made a $450M move into SUI, supported by the Sui Foundation, marking the first Nasdaq-listed SUI treasury. Early signs of activity are also appearing in Bittensor’s TAO, Binance’s BNB, and others.

The trend of DATCOs expanding beyond traditional markets, and past Bitcoin and Ethereum into the broader digital asset class, was also highlighted in Galaxy’s recent report. The pattern is clear: wherever there’s liquidity, narrative strength, and a supportive community, a treasury company is likely to emerge. Early DATCOs moved cautiously. Purchases were smaller, episodic, and had limited measurable impact on price or holder dispersion. But by the second half of 2025, the playbook had matured, as shown in the graph below.

Promises and Risks of DATCOs

Promises:

• ​​The promise of DATCOs lies in their ability to reshape supply dynamics and open new pathways for institutional capital. By removing large amounts of cryptocurrency from circulation, these companies can create a sustained supply squeeze that, in theory, supports higher prices.

• For assets like Ethereum or Solana, the effect can be even more pronounced when holdings are staked, locking them up not just for storage, but for active participation in network security. The staking yields provide an income stream, helping offset operating costs and adding to the asset base over time.

• For investors unable to hold crypto directly, DATCOs offer a compliant, regulated equity vehicle for exposure, much like gold mining stocks did for gold before ETFs existed. When shares trade at a premium to the value of their holdings, DATCOs can raise fresh capital at favorable terms, increasing the number of coins each share represents, a compounding effect that benefits existing shareholders.

Risks:

• The risks are just as significant as the opportunities. Many DATCOs depend heavily on uninterrupted access to capital markets. In favorable conditions, this can fuel rapid growth; in a downturn, it can quickly become a liability. If valuations fall or funding dries up, companies may be forced to sell assets or raise capital on highly dilutive terms.

• The very premium that enables growth in good times can just as easily magnify downside in tougher conditions. Treasury-related announcements often trigger sharp swings in a company’s share price, sometimes entirely disconnected from the fundamentals of their underlying holdings. These strategies carry persistent execution risk, relying on management’s ability to time the market, allocate capital effectively, and sustain investor confidence.

• One key variable that remains untested is how these companies will manage their treasuries through a sustained bear market. To date, most DATCO strategies have only been battle-tested in bull or sideways conditions, leaving a critical gap in real-world validation.

• Layered on top is regulatory uncertainty. The treatment of staking rewards, evolving accounting standards for digital assets, and potential securities reclassifications could all reshape the core economics of the model. A single adverse ruling could severely constrain operations or profitability in ways not yet priced in by markets. It’s a reminder that governance, reputation, and market trust are as much risks as balance sheet exposure.

• Even public sentiment can be volatile. A high-profile example: a proposed $1.5 billion Solana treasury initiative tied to investor Joe McCann was reportedly scrapped following backlash tied to his fund’s underperformance. This serves as a reminder that governance, reputation, and market trust are as much risks as balance sheet exposure.

  
  

  
  

  

  
  

  Source: X

For all their promise, DATCOs are not a one-way bet. They are complex, high-risk financial vehicles operating at the intersection of volatile assets, investor psychology, and evolving regulation.

Conclusion

In less than five years, DATCOs have moved from a market curiosity to a meaningful force in digital assets. Bitcoin blazed the trail, Ethereum refined the model through staking, and now altcoins are fast joining the roster.

The model shines in bull markets: raise funds, buy crypto, stake where possible, and let asset appreciation and yield expand the balance sheet. But its elegance carries fragility since heavy leverage, over-concentration, or a sudden regulatory shift could quickly turn a market driver into a forced seller.

For now, DATCOs are tightening supply, signaling deep institutional conviction, and offering investors a new way to align with their preferred networks, not just by holding tokens, but by owning equity in companies purpose-built to accumulate and hold them.

Whether these firms become enduring pillars of corporate finance or cautionary tales of overreach will hinge on three factors: market cycles, management discipline, and the regulatory path ahead. What is clear already is that DATCOs are no longer a sideshow. They are shaping the very structure of crypto markets in real time.

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Disclaimer

The content of this article is for informational purposes only and should not be considered financial, investment, or legal advice. Investing in cryptocurrency projects involves a high degree of risk, including the potential loss of all invested funds. The views expressed are those of the author and do not necessarily reflect the opinions of Republic. Readers should perform their own due diligence and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results. Cryptocurrency markets are highly volatile, and regulatory environments are subject to change. Always invest responsibly.