Crypto Treasury: Wall Street’s “Emperor’s New Clothes” and the Crypto Market’s “Historical Reversal”

Wall Street's Digital Asset Treasury (DAT) model, often hailed as financial innovation, is criticized as a form of regulatory arbitrage and a potential step backward for crypto maturity. Key arguments include:

DATs are not true innovation but a loophole for Wall Street to bypass crypto regulations, likely to fade as compliance channels tighten and bubbles burst.
The model operates on a "reflexivity" trap: issuing shares to buy crypto, which boosts asset and stock prices, enabling more share issuance. This cycle works in bull markets but risks a spiral collapse if the net asset value premium disappears.
DATs complicate simple asset acquisition, exploiting education gaps and compliance hurdles to sell packaged products—similar to historical structured products like CDOs—harvesting value through complexity.
By valuing crypto through narrative (PN) rather than revenue (PS) or earnings (PE), DATs reverse the market's evolution toward fundamental metrics, reintroducing speculative volatility.
While DATs may inject short-term capital, their real risk lies in merging Wall Street leverage with DeFi composability, potentially unlocking new on-chain leverage玩法 that could amplify systemic risks.

Author: Haotian

While everyone is celebrating Wall Street's "financial alchemy"—the DAT model—has anyone considered whether DATs are actually turning history backwards? Here are some perspectives:

First, let’s understand what DAT, PS, PE, and PN are...

DAT (Digital Asset Treasury) is a platform that raises funds by issuing shares to investors and then using the funds to purchase crypto assets (such as BTC and ETH) to form a reserve fund. Ideally, this system achieves a positive cycle of issuing shares, purchasing crypto assets, and then issuing more shares and purchasing more crypto assets.

I won't go into other concepts here, from traditional finance's PE (price-to-earnings ratio, how much you pay for every dollar of profit, the stuff of value investing), PS (price-to-sales ratio, how much you pay for every dollar of revenue, the so-called "price-to-dream ratio"), to my made-up PN (price to narrative ratio, how much you pay for a story, pure speculation).

The detailed views are as follows. Any similar or surprising opinions are for reference only:

1) DATs are not “financial innovation” but rather a “regulatory arbitrage” channel set up by Wall Street to circumvent cryptocurrency regulation.

However, since the Paul Atkins-led Project Crypto and the implementation of stablecoin bills such as GENIUS and CLARITY, this wave of DATs has surged. On the surface, it seems to be a trend initiated by a number of Wall Street shell companies imitating the success story of Micro Strategy. However, I believe that it is actually a last-ditch effort before the unofficial compliance channels are narrowed. Therefore, the Fomo trend of DATs is bound to gradually be dispelled under the dual control of its own bubble bursting and government regulatory pressure.

2) DATs’ “financial alchemy” may seem magical, but it is actually a typical “reflexivity” trap.

In fact, many people are clear about the logic. MicroStrategy's flywheel of "issuing shares → buying coins → coin prices rise → stock prices rise → issuing more shares" looks beautiful, and in fact it is beautiful, but under the amplifying effect of a group of followers, the shortcomings of this "reflexive system" will also be accelerated: it can indeed amplify profits in a positive cycle, but once it reverses, it will spirally collapse.

Especially when the mNAV (net asset value) premium disappears or even turns into a discount, the entire model becomes ineffective instantly - you can no longer issue shares, buy tokens, and may even be forced to sell tokens;

3) DATs embody the financial harvester gene of Wall Street, which is good at complicating and packaging simple problems and ultimately implementing "dimensionality reduction attacks."

Putting aside the factors of regulatory arbitrage, not to mention the historical factors of MSTR, but in the context of ETFs such as BTC and ETH and various crypto-friendly governments and policies, if you want to buy Bitcoin, just buy it directly, package it as an institutional-level digital asset allocation strategy, and then concoct a new concept of DATs.

Essentially, they're exploiting market awareness gaps, time-consuming education costs, and complex compliance processes to sell structured products. While DATs aren't as aggressive as historical products like CDOs (collateralized debt obligations) and CDSs (credit default swaps), they achieve the same goal.

4) DATs are essentially a historical regression of the valuation system, forcibly pulling cryptocurrencies from the mature track of PS/PE back to the wild era of PN.

The Crypto market has gone through several cycles of development and evolution, from the pure concept speculation in 2017, to the DeFi era focusing on TVL and protocol revenue (PS thinking), to some projects starting dividend repurchases (PE thinking), and the PMF that everyone frequently mentions. The whole process is actually on the path to maturity.

But the DAT craze has brought everyone back to the price-to-narrative logic of buying into stories and concepts. Isn't this a step backwards? In the short term, native investors can be indifferent, as Fomo does bring in real money. But in the long term, it adds a lot of uncertainty.

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Having said that, this unconventional approach of DATs may actually work, but we cannot expect off-market purchases to drive a super bull market. In my opinion, the real Pandora's box lies in the new "on-chain leverage" gameplay that DATs may trigger.

To put it bluntly, it is to connect Wall Street's leverage game with the composability of DeFi. The OTC market is responsible for incremental funds and endorsements, while the market focuses on hype and leverage amplification. Especially for Crypto natives who are still eagerly hoping for miracles from Wall Street, they must not ignore the innovative magic of the pure Crypto market.