In the ever-evolving world of cryptocurrency, digital asset treasuries (DATs) have taken center stage as crucial players in the market dynamics. Recently, a report by Standard Chartered’s Geoff Kendrick has shed light on how these entities are grappling with significant challenges. The report emphasizes ether (ETH) as the leading contender among digital assets, poised to emerge as the most resilient and potentially rewarding choice for treasuries.
Turbulent Times for Digital Asset Treasuries
Digital asset treasuries are publicly traded companies that maintain cryptocurrency holdings on their balance sheets. They have faced a rough patch recently, as their market net asset values (mNAVs) have dipped below 1. This decline presents a serious issue, as it diminishes these firms’ incentive and sometimes even their capacity to continue purchasing cryptocurrencies. Consequently, a critical source of demand for major cryptocurrencies like bitcoin (BTC), ether, and Solana (SOL) is under threat.
Kendrick points out that the mNAV ratio plays a pivotal role in determining the financial health and strategic direction of these treasuries. A low mNAV indicates that these firms might pivot towards consolidation rather than expansion. This shift could reshape the landscape of crypto demand and influence price movements in the market.
Ether’s Edge: Staking Yield and Growth Potential
Kendrick argues that ether treasuries are better positioned for success than their bitcoin or solana counterparts. A key advantage lies in ether’s ability to offer staking yields, providing a steady income stream for investors. This financial incentive is absent in bitcoin, giving ETH an edge in attracting treasuries looking to maximize returns.
Moreover, regulatory clarity surrounding ether provides an additional layer of confidence for investors. As governments and financial institutions worldwide continue to navigate the regulatory landscape of cryptocurrencies, ether’s established position offers a semblance of security and stability that is particularly appealing to institutional investors.
Ether treasuries have been on an aggressive acquisition spree, purchasing 3.1% of ETH’s circulating supply since June. Bitmine (BMNR), the largest player in this space, has continued to bolster its holdings, now owning a substantial 2 million ETH. This aggressive accumulation strategy underscores the confidence that treasuries have in ether’s long-term value and potential for growth.
The Bitcoin Conundrum: Consolidation and Coin Rotation
Bitcoin treasuries, on the other hand, are facing a different kind of challenge. The market saturation of bitcoin-focused treasuries has reached a tipping point. The flagship entity, Strategy, has inspired a wave of imitators, nearly 90 by the latest count, collectively holding over 150,000 BTC. This represents a sixfold increase this year alone.
However, with mNAVs staying below 1, Standard Chartered anticipates a phase of consolidation among these bitcoin treasuries. Rather than acquiring new bitcoin, firms like Saylor’s Strategy may opt to buy out rivals, leading to a scenario of coin rotation without introducing fresh demand into the market. This consolidation could potentially stabilize bitcoin’s market dynamics but might also limit its growth potential in the short term.
Solana’s Small But Promising Footprint
While solana treasuries have yet to establish a significant presence, they are not without potential. Solana’s appeal lies in its high throughput and lower transaction costs, making it an attractive option for certain institutional investors. However, its relatively small footprint means it has a long way to go before it can compete with the established giants of ether and bitcoin.
That said, the possibility of earning staking yields with solana is another factor that could gradually draw more attention and investment from digital asset treasuries. As the crypto market continues to mature and diversify, solana might carve out a niche for itself in this competitive landscape.
The Road Ahead for Digital Asset Treasuries
As the crypto market navigates these turbulent times, the future of digital asset treasuries will likely hinge on their ability to differentiate themselves. Kendrick suggests that the winners will be those entities that can secure funding at the lowest cost, achieve the scale necessary to attract liquidity and investor interest, and crucially, earn staking yields. This strategic differentiation could pave the way for ether treasuries to emerge as the dominant force in the market.
For now, ether appears to be the most promising beneficiary of this shift, given its attractive staking yields and regulatory clarity. However, the landscape remains dynamic, and the potential for solana to grow its presence shouldn’t be underestimated. Meanwhile, bitcoin treasuries face a period of consolidation, which may redefine their role in the market.
The evolving strategies of digital asset treasuries are poised to significantly influence the broader crypto market. With ether leading the charge, the coming months could bring substantial shifts in demand and investment patterns, shaping the trajectory of cryptocurrencies in 2025 and beyond.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
