Digital Asset Treasury Companies (DATCOs), lying at the intersection of crypto and traditional finance (TradFi), have emerged as a strong narrative in 2025. According to VanEck Research, DATCOs hold $135 billion worth of crypto assets at the end of September 2025.
This article will explain what DATCOs are, their origin, provide a market overview, and explain how to build a risk-minimized model for their long-term growth.
What Is a DATCO
DATCOs are publicly traded firms that hold BTC or other digital assets, such as ETH and SOL, on their company balance sheets. However, unlike companies like Tesla, whose crypto exposure is incidental (Musk’s connection to DOGE), DATCOs actively add digital assets as a primary strategic move. Thus, DATCOs have an explicit goal and intention of growing their crypto holdings as a direct part of their firms’ assets.
Investors who buy shares of these DATCOs effectively invest in the companies as a high-beta proxy exposure to the underlying digital asset. This bridges the otherwise different worlds of equity markets and crypto to provide a regulated and safer investment vehicle for crypto-curious investors.
As economist Lyn Alden explained, “trillions of dollars in global capital are managed under mandates that prohibit direct ownership of digital assets but permit investments in publicly listed equities. For these investors (pensions, sovereign wealth funds, endowments), DATCOs offer compliant access to crypto exposure, and their share prices often reflect this scarcity.
Instead of just buying the crypto already on the balance sheet, investors are buying the regulatory arbitrage and capital formation flywheel these companies represent.”
Although DATCOs have become a dominant narrative this year, their origins can be traced back half a decade.
A Brief History of DATCOs
In 2020, Michael Saylor converted a significant portion of his company MicroStrategy’s cash reserves into BTC when its price was just $11,650. MicroStrategy thus became the first publicly traded company to become a DATCO following Saylor’s playbook of issuing debt to acquire BTC, launching At-the-Market (ATM) equity programs, and bull-posting on social media.
This transformed how corporations viewed BTC — not as a speculative asset, but a strategic reserve that is immune to fiat currency’s debasement. MicroStrategy’s (now Strategy) move shot up the company’s market capitalization and created a new narrative around corporate treasury. Although Strategy laid the foundations, several other historical factors contributed to DATCO’s growth.
In 2023, a Financial Accounting Standards Board (FASB) update enabled public companies to mark their crypto holdings to the market. The following year, the US Securities and Exchange Commission (SEC) approved spot Bitcoin ETFs, while global geopolitical instability led to volatile fiat currencies.
Consequently, many companies opted for BTC as a store of value amidst mainstream financial recognition, while others focused on altcoin-based treasury strategies. Among these companies, some DATCOs have pursued a passive, accumulation-only strategy, whereas others followed a more active treasury model with yield-bearing capabilities.
A Market Overview of DATCOs
DATCOs’ treasuries are dominated by BTC holding companies controlling over $139 billion, ETH holding companies with $18 billion, and SOL holding companies with $1.4 billion, as of October 10. This demonstrates BTC’s dominance among DATCOs, followed by a steadily growing ETH and SOL treasury narrative.
BTCS, a company that recently pivoted to a DATCO, is the largest European DATCO. BTCS is unique and different from others in its business model. Unlike other DATCOs that follow a passive treasury model, BTCS leverages an active treasury strategy.
In this model, BTCS functions as a blockchain operator and manages infrastructure for running the decentralized economy. Thus, BTCS doesn’t simply acquire digital assets — it runs a revenue-generating business by offering Staking-as-a-Service for protocols like CoreDAO and receives rewards in return.
Besides its BTC exposure, BTCS leverages the native yields of emerging networks like ZIGChain and CoreDAO. Through its active treasury model, BTCS stakes the digital assets held in its treasury and deploys them in DeFi to generate additional yields. This ensures BTCS investors are immune to macroeconomic conditions and crypto price volatility because of its diversified revenue strategies.
Although companies like Strategy (with over $71 billion in BTC holdings) still follow a passive BTC accumulation strategy, other firms like SharpLink Gaming, Bit Digital, and Tron Inc. are involved in yield-generating productive strategies and accumulating non-BTC assets.
Towards a Sustainable DATCO Ecosystem
Currently, the predominant DATCO growth model critically depends on a persistent equity premium to Net Asset Value (NAV). This model will collapse if the premium collapses or flips to a discount.
Companies will then start buying back stock to arbitrage the discount using their digital asset or cash reserves. But if redemptions and buybacks become a norm, it could lead to a collapse of DATCOs.
The current model of raising equity, buying crypto, and repeating the process sustains as long as crypto prices keep rising, equity premiums are elevated, capital markets are liquid, and investor sentiment remains bullish. A change in any one factor will spell doom.
Therefore, DATCOs who follow an active treasury model like BTCS are better equipped to survive bear markets. Thus, DATCOs must actively pursue protocol diversification and hybrid treasury models that combine cash-flowing businesses and yield-generating strategies with capital-efficient digital asset accumulation. Coupled with adequate geographical diversification, DATCOs can bring in more investors into crypto through its compliant and liquidity-rich investment vehicles.
