What’s Going On With Crypto Treasuries? TradFi’s New Game Explained

Gone are the days when crypto was solely the domain of retail investors. With the rise of crypto treasuries, institutions are closely monitoring the industry. Increasingly, public companies in the United States, Europe, and Japan are exploring cryptos like Bitcoin, Ethereum, and Solana and incorporating them into their balance sheets.

Digital Asset Treasury Companies (DATCOs) are redefining how traditional investors, often those preferring equities, gain exposure to burgeoning crypto markets. As of mid-August 2025, the total crypto market stood at over $4 trillion. What’s more? This figure is expected to grow as Wall Street and governments embrace the sector. In the United States, the objective is to regulate crypto, and the enactment of the GENIUS Act into law in July marked a major advancement towards this goal.

However, as crypto finds adoption and public companies embrace some of the best cryptos to buy, are crypto treasuries sustainable? What risks should be considered? Will the industry soar in a straight line to the moon?

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The Rise of Crypto Treasuries

When Michael Saylor of MicroStrategy, now Strategy, began buying Bitcoin in 2020, many criticized him. Bitcoin was struggling, and COVID was creating chaos in global financial markets.

It turned out that by buying BTC ▲1.27% using debt, MicroStrategy acted as a proxy for traditional finance (TradFi) investors seeking indirect crypto exposure.

When BTC USD and crypto prices surged in 2021, reaching as high as $69,000, the MSTR stock moved in lockstep with BTC, emerging as one of the best-performing securities.

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Since then, the concept has exploded. A recent Galaxy Digital report stated that DATCOs collectively hold over $100 billion in crypto assets. Most public companies prefer Bitcoin and Ethereum, not even emerging 1000X cryptos.

According to Galaxy Digital, public companies, led by MicroStrategy, hold nearly 800,000 BTC, while firms opting for ETH hold over 1.3 million ETH. Companies willing to tolerate higher volatility have exposure to SOL ▲14.81%, Bittensor, BNB, and even Hyperliquid.

The appeal of DATCOs lies in their ability to offer investors crypto exposure without directly holding volatile assets.

As Pantera, a crypto venture capital firm, noted in a letter, DATCOs can generate yield to grow net asset value per share. DATCOs allow investors to own more of the underlying token over time compared to holding spot crypto.

This advantage is particularly true for public firms holding tokens of proof-of-stake networks like Solana and BNB, which distribute annual staking yields. Unlike spot crypto ETFs of non-yielding assets like BTC, owning shares of a public company with crypto exposure translates to higher yields.

Case Studies: Pantera, World Liberty Financial

Aware of this benefit, Pantera has invested over $300 million in public companies holding crypto on their balance sheets.

These include SharpLink Gaming, which has aggressively acquired ETH, DeFi Development Corp, and BitMine Immersion. BitMine Immersion controls 1.15 million ETH, making it the largest Ethereum treasury in the world. Meanwhile, DeFi Development Corp is heavily invested in Solana, holding 1.3 million SOL and raising $165 million in July 2025 to buy more SOL.

World Liberty Financial, owned by the Trump family, plans to raise $1.5 billion to buy back its token, WLFI, through ALT5 Sigma. By repurchasing tokens, World Liberty Financial follows MicroStrategy’s playbook, using a public company to democratize crypto exposure.

Additionally, another Trump company, Trump Media & Technology Group, is pivoting, adding $2 billion in BTC to its balance sheet.

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Are Crypto Treasuries Sustainable?

As attractive as they are, are crypto treasuries sustainable? Is the DATCO model robust enough to withstand crypto volatility?

Public companies adding cryptocurrencies like ETH, SOL, and BNB to their balance sheets can earn staking rewards, providing higher yields through non-dilutive returns. DATCOs also allow traditional investors to gain indirect crypto exposure through familiar equity markets across various jurisdictions.

By integrating crypto, companies can diversify, mitigating risks if their stocks crash.

However, DATCOs often trade at a premium, and Galaxy Digital warns that a collapse in this premium could trigger sharp drawdowns, especially for firms relying on debt to acquire crypto.

Additionally, risks remain. Evolving regulations may restrict DATCOs’ ability to operate or raise capital efficiently. High volatility in the crypto market could wipe out treasury values, impacting stock prices and shaking investor confidence. Falling prices could also make it harder for firms to raise capital to buy crypto unless investors have strong conviction in the crypto in question.

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