A new class of public companies is reshaping the relationship between traditional equity markets and digital assets.
Digital Asset Treasury Companies (DATCOs), firms that accumulate crypto assets like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) as a core business strategy, now collectively hold more than $100 billion in cryptocurrencies.
Their rapid rise is turning them into a significant force behind crypto's ongoing bull market.
What Happened: According to a research report by Galaxy Research, DATCOs hold approximately 791,662 BTC and over 1.3 million ETH.
That represents nearly 4% of Bitcoin's circulating supply and more than 1% of Ethereum's.
The majority of these holdings are concentrated in a few firms, with Strategy (NASDAQ:MSTR) leading the category at over 600,000 BTC, worth $71.8 billion at current prices and accounting for more than 70% of all Bitcoin held by public treasury companies.
The emergence of DATCOs has created a new financial structure where Bitcoin prices are increasingly influenced by equity market dynamics.
These companies rely on mechanisms like At-the-Market (ATM) equity programs and Private Investments in Public Equity (PIPEs) to raise capital when their share prices trade at premiums to the net asset value (NAV) of their crypto holdings.
That capital is then used to acquire more digital assets, reinforcing their equity premium and encouraging further inflows.
Strategy, Metaplanet (OTC:MTPLF), and others have repeatedly executed this loop.
Metaplanet, sometimes dubbed as “Japan’s MicroStrategy,” trades at a 179% premium to NAV and uses that valuation to expand its treasury more efficiently.
In contrast, Strategy trades at a 58% premium, reflecting its maturity and scale.
Galaxy Research notes that this capital formation flywheel, raising equity, purchasing crypto, and increasing NAV per share, has become a structural source of demand for digital assets.
It also introduces a dependency: if investor sentiment shifts, share price premiums may vanish, cutting off access to capital and halting asset accumulation.
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Why It Matters: Beyond Bitcoin, new entrants to the DATCO space are diversifying their treasuries into assets like ETH, Solana (CRYPTO: SOL), BNB (CRYPTO: BNB), and XRP (CRYPTO: XRP).
Ethereum-focused DATCOs, in particular, are employing staking and DeFi strategies to generate non-dilutive yield on their holdings, a capability Bitcoin lacks in its current form.
Geographically, DATCOs are expanding.
While the U.S. remains the central hub, other regions, especially Japan and parts of Europe, are seeing increased activity.
Galaxy's analysis classifies countries into high, medium, and low concentration tiers based on the number of DATCOs and the size of their holdings.
Valuation disparities across DATCOs are wide.
Some firms trade close to NAV, while others command significant premiums based on aggressive accumulation strategies or exposure to specific crypto ecosystems.
For example, Tron Inc. (NASDAQ:TRON), which holds a significant position in (CRYPTO: TRX), trades at a 64% premium — a valuation influenced more by ecosystem branding than asset volume.
Galaxy's report also outlines the risks. If equity premiums fall, whether due to a shift in investor sentiment, market volatility, or regulatory changes, the DATCO model may become unsustainable.
Overreliance on PIPEs or excessive issuance through ATMs can dilute existing shareholders, especially if not matched by crypto gains.
In the event of a reversal, companies might initiate share buybacks using crypto reserves to defend NAV.
BitMine (AMEX:BMNR) has already secured board approval to repurchase up to $1 billion of its own stock.
However, such moves are only viable while companies still hold capital or liquid assets. If buybacks and redemptions become widespread, they could reduce net crypto accumulation or even trigger net selling, undermining one of the current cycle's key bullish factors.
What’s Next: Despite these risks, the impact of DATCOs on the crypto market is already visible.
Galaxy emphasizes that, excluding Strategy, DATCOs hold roughly $32 billion in crypto or just 0.83% of the global crypto market cap.
That footprint is growing, as dozens of new entrants continue to adopt treasury-focused models.
For now, the DATCO model offers compliant access to digital assets for institutions that cannot hold crypto directly.
As long as asset prices trend upward, equity premiums remain high, and capital markets stay receptive, the model may continue to drive demand.
But its increasing influence also means that Bitcoin's price is no longer detached from traditional financial flows and that could reshape how investors assess both opportunity and risk in the next phase of the market.
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