- The latest drop in crypto prices may force massive sell-offs from DATs.
- Bitcoin, Ethereum, and Solana are the top crypto assets held by DATs, making them the most vulnerable if these entities decide to dump on the market.
When Strategy (formerly MicroStrategy) introduced the concept of a digital asset treasury (DAT) strategy, many hyped it as an infinite money glitch in the financial system. However, the mounting selling pressure in the crypto market has culled the narrative.
DATs Underperforming Since September
Guy Turner, founder of Coin Bureau, warned in a YouTube video that DATs have significantly underperformed since early September. In addition to the ensuing profit-taking after August, followed by massive crypto liquidations in October, these companies have seemingly popped their bubble.
According to Guy, the rapid rise of DATs this year has significantly diluted their demand. The most affected were new players who now have to contend with their NAV (net asset value) premiums either declining or already at a discount territory.
For context, NAV represents the per-share market value of an investment. If the share’s price is higher than its NAV, then it’s at a premium. The opposite would mean it’s at a discount.
High NAV premiums attract investors because they indicate strong market confidence in a company’s capability to hold, grow, and leverage its crypto treasury. A drop to the discount level could erode investor sentiment and trigger a chain of market sell-offs.
Crypto Assets in Danger with the Looming DAT Sell-Offs
The crash of DATs or their sudden asset offloading could ignite a devastating effect on the crypto market. Guy revealed that the three crypto assets most exposed to DATs at this rate are the following:
Bitcoin (BTC)
Bitcoin obviously has the lion’s share in DATs. Hence, it’s the most exposed asset to their looming liquidations.
To date, over 1.67 million BTC are held by 128 public treasury companies based on Coingecko data. Michael Saylor’s Strategy notably possesses over half of the figure, or 641,692 BTC, as of writing.
The sheer volume of Bitcoin held by large DATs could spell a dramatic selling pressure if they decide to dump into the market. Moreover, the impact would be amplified by leveraged positions getting wrecked from BTC’s intensified downward move, which could mirror the multibillion-dollar liquidations in early October.
The amount was roughly $157 billion to $179 billion at Bitcoin’s pivot between $94K and $107K this week.
Ethereum (ETH)
Ethereum is next on the list, as over 5.45 million of its supply is held by around 18 DATs. The figures ranged from $16 billion to $19 billion as ETH swung between $3K and $3.6K this week.
Tom Lee-linked Bitmine Immersion accounts for over half of their float at over 3.5 million ETH.
Solana (SOL)
Solana falls third in the rankings, with 15 DATs locking in 17.43 million of its supply. This was valued at approximately $2.35 billion to $2.98 billion as SOL hovered between $135 and $171 last week.
Forward Industries, a design and manufacturing firm, leads this group with its 6.87 SOL portfolio.
Disclaimer: The facts presented in this article are only for informational purposes. They do not serve as financial advice or product recommendations from the author or the Blockzeit team.
What’s your Reaction?
+1
0
+1
0
+1
0
+1
0
+1
0
+1
0
+1
1
