The Fall of DATs and Why Should You Care

Every crypto bull run has its heroes: ETFs, halvings, new narratives, the meme of the moment. But in the background of this cycle, a quieter force has been amplifying every move — a set of companies that turned their stock price and balance sheets into a kind of leverage engine for Bitcoin and other assets. When that engine runs smoothly, it supercharges rallies. When it seizes up, it can flip into brutal selling pressure at exactly the wrong time.

Now a dry-sounding debate in traditional finance is putting that engine under strain, with consequences that reach far beyond a few corporate treasuries or obscure tickers. If you hold crypto, build in the space, or just refresh the BTC chart a bit too often, you’re already affected — and the full impact may be far greater than it appears.

But what exactly is going on, and why should you even care? Let's dive in.

Chapter 1: October 10, 2025

Morgan Stanley Capital International (MSCI), the third-biggest provider of financial indices after S&P Dow Jones and FTSE Russell, releases an announcement of an ongoing consultation about whether or not “companies whose digital asset holdings represent 50% or more of their total assets” are funds on their own and should be excluded from the index funds.

Then follows this statement:

“MSCI proposes to exclude from the MSCI Global Investable Market Indexes companies whose digital asset holdings represent 50% or more of their total assets.”

For companies such as MicroStrategy (MSTR), being included in the index fund is a fundamental power lever for capital flow, as all funds that mimic an index (e.g., Vanguard VOO mimicking the S&P 500’s composition) are forced to buy companies included in it.

The way MicroStrategy and similar Digital Asset Treasury (DAT) companies raise money is by issuing and selling their shares. Then they invest that money into more Bitcoin or other crypto assets, growing their treasury, which allows them to issue more shares. And so on.

If funds are forced to buy them, it’s an infinite capital-generating loop for the DATs.

This proposal, if MSCI decides to adopt it, puts a big red cross on this entire plan.

But why would this matter to the crypto industry? These are just some TradFi folks, as always, fighting over regulations and paperwork.

Chapter 2: Why DATs Matter?

MicroStrategy holds roughly $55 billion worth of Bitcoin (or almost 650,000 whole bitcoins). This and other DATs were one of the main drivers of the current cycle, buying over $40 billion, with MSTR alone acquiring $20.5 billion worth of Bitcoin since the beginning of 2025:

Chart: MicroStrategy Bitcoin Acquisitions by Year

Data from: https://www.strategy.com/data

Excluded from indices, they will lose one of their major capital inflows.

Ok, so DATs are not buying anymore — we should still be fine, right?

Chapter 3: Enters mNAV

“The hell is that?” you ask.

Using TradFi’s jargon:

mNAV stands for "market-cap-to-net-asset-value" multiple.

So, basically, it's the company’s market value (value of all company shares available on the market together) divided by its net crypto asset holdings (how much Bitcoin or other crypto the company owns).

If mNAV is >1: investors value the company more than the fundamental value of its assets.

If mNAV is <1: investors value it less than the fundamental value of its assets.

mNAV = 1: perfect balance. The price of each share equals the price of the underlying assets it owns.

The fundamental promise of DATs is that assets per share will always grow.

Twenty One Capital Landing Page Screenshot

(Main page of the 3rd-largest DAT company — Twenty One Capital: https://xxi.money/)

Therefore, when mNAV is above 1, it makes sense to issue more stocks, sell them, and buy more crypto for their treasury (imagine a guy selling half of a slice of pizza for full price to a hungry gentleman so he can buy one whole slice for himself).

But what happens if mNAV drops below 1?

Well, now the company’s market price is undervalued compared to its asset holdings, and issuing more shares will only dilute assets per share for existing investors (the gentleman is full now, so he’ll only take the deal if the guy offers a discounted price).

Chapter 4: The Impact

In order to stay true to their promise, DATs will need to start selling their assets and buying their own shares back. This means that the massive financial force that was driving crypto up this cycle may now unleash an equally powerful selling pressure on it.

Most DATs are underwater now: