Key Takeaways
Why do DATs face resistance from the community?
Their alleged supply glut and VC links have scared some members.
What’s next for DATs?
The MSCI assessment in mid-January could determine the fate of the sector.
Digital Asset Treasuries (DATs) are back in the news following the threat of exclusion from the MSCI index and the ongoing market sell-off.
Notably, SharpLink, one of the ETH-focused DATs, sold $33.5 million worth of ETH, putting further pressure on the already fragile market.
Another one was also made dump earlier in November, and the trend received negative criticism, with DATs being labeled a “terrible, VC scam with overhang.”
However, Hasseb Qureshi, a partner at VC firm Dragonfly, discredited the generalization. He stated that DATs do not create “net selling pressure.” added,
“So DATs may have gotten too big, but the idea that DATs were ultimately bad for crypto prices is clearly wrong.”
Source:
He noted that DATs would likely start buying again after mNAVs rose above 1.
Who’s selling?
On the SharpLink sell-off and likely pressure from other companies whose mNAV has fallen below 1 (the value of crypto holdings has fallen below their enterprise value), Haseeb says replied,
“Markets don’t move because of DAT sales. Almost none of the DATs have sold anything. The ones that have are small.”
Some of the largest venture capital firms, such as MultiCoin Capital, helped create Forward Industries, one of the largest Solana-focused treasury companies.
Other smaller players received support from venture capital funds, the chain’s foundation, or individual capital increases.
Given the infamous history of ‘VC tokens’ often being dumped on the retail market when the vesting period expires, suspicion remained strong during these VC-led DATs.
Crypto Treasuries Lose $45 Billion
That said, the top DAT leaders, like Ethereum [ETH]-focused BitMine Immersion, Strategy, or SOL’s Forward Industries, had no data on sales of their assets, at least at the time of writing.
In addition, the planned reclassification of DATs by the MSCI index According to some analysts, this could put more pressure on the space and the entire crypto market.
Actually David Bailey referred to the DAT lockout threat as “Operation ChokePoint 3.0,” drawing parallels to the banking access restrictions imposed on crypto companies during the Biden era.
“It is discriminatory and capricious that a systemically important stock index excludes Bitcoin and digital asset companies due to de-indexing and exclusion after years of actively blessing their inclusion. We should call it what it is: Operation Choke Point 3.0.”
That said, crypto treasuries have lost more than $45 billion in value, while DATs’ assets fell from $140 billion to $97 billion during the fourth-quarter correction.
Source: Het Blok