Industry and Whales

Recently, the mid-to-long-term outlook for the Digital Asset Trust (DAT) industry has been collectively questioned by industry executives. Several institutional leaders have openly stated that the current DAT model struggles to support sustainable profitability, risk management, and compliance adaptation, making it difficult to continue rapid expansion before around 2026. The sentiment is shifting from a "growth story" to a "survival exam." In this context, a wallet migration by an anonymous whale has drawn particular attention: on-chain data shows that this address withdrew a total of 2,218 ETH and other assets from exchanges like Kraken, with a total value of approximately $9.61 million, transferring the assets to a self-custody wallet. This action contrasts with the industry's pessimistic expectations, prompting the market to re-examine the inherent contradictions of the DAT model—on one hand, relying on assets under management (AUM) and business expansion to drive valuation, while on the other hand, needing to maintain asset net value and liquidity safety under high volatility and regulatory pressure. The structural conflict between expansion speed and survival capability is being amplified.

DAT Survival Line

Within the DAT industry, mNAV (managed net asset value) is regarded as a key indicator of a company's survival capability, underpinned by the dynamic balance logic between assets and liabilities: assets are primarily composed of Bitcoin, Ethereum, and other crypto assets, while liabilities include client redemption pressure, structured product commitments, and proprietary leverage. Once the market experiences a unilateral downturn and mNAV falls below a certain "safety boundary," it may trigger a wave of redemptions and passive deleveraging, thereby amplifying price volatility. Recently, the stock prices of leading DAT companies have seen significant corrections, compounded by Bitcoin's continued decline since peaking in October 2025, leading to a rapid increase in investor skepticism regarding their profitability model stability and liquidity management capabilities. Vincent Chok, CEO of First Digital, pointed out that the DAT model must evolve to meet traditional financial investors' expectations for transparency, drawdown control, and return structure; otherwise, it will struggle to gain the trust of long-term capital. This means that the old model, which solely relies on "growth in management scale" and "crypto bull market beta," is being forced to transition to more refined risk pricing and active management. mNAV is no longer just a passive recording metric but a constraint that compels the upgrade of the business model.

Bitcoin and Alternatives

In contrast to the pressures on the DAT model, Bitcoin is being embraced by more institutional balance sheets in a different manner. Data shows that the number of companies holding Bitcoin has increased from about 70 to over 130 within 2025, nearly doubling, reflecting that publicly listed companies and traditional institutions are directly incorporating BTC into their financial allocations, rather than relying entirely on DAT or similar structured vehicles. This trend, combined with the rapid expansion of crypto ETFs, poses substantial alternative pressure on DAT's role as an intermediary for Bitcoin allocation and custody: ETFs, with lower fees, clearer regulatory frameworks, and higher market liquidity, are diverting funds that might have otherwise entered DAT. In this context, Ryan Chow of Solv Protocol suggested that DAT needs to view Bitcoin as "digital capital" rather than a passive holding asset, actively managing it through hedging, yield enhancement, and term management; otherwise, it will struggle to find a space between ETFs and direct holdings. The role of DAT is being forced to shift from "holding Bitcoin on behalf of clients" to "managing a basket of digital capital," and its value proposition must be redefined around active management and structural design.

Whale Asset Migration

As the industry enters an uncertain phase, the on-chain operations of whales are often seen as important sentiment indicators. On-chain tracking shows that this anonymous whale recently withdrew 2,218 ETH from platforms like Kraken, bringing the total holdings at this address to 2,738 ETH, estimated to be worth about $807,000 at current prices. Structurally, this operation signifies a migration from "tradeable liquidity" on exchanges to "cold storage" in off-chain or self-custody addresses, nominally reducing the amount of sellable chips in the secondary market, which may be interpreted in the short term as a bullish stance on ETH prices or at least an attitude of "refusing to part with chips at the current price level." Meanwhile, the overall holdings of whales have not shown drastic reductions recently, instead reflecting characteristics of "withdrawing coins for locking up, reducing exchange exposure." However, the market is also generally aware that the true identity and specific operational intentions of this whale cannot currently be confirmed; whether it is a long-term institution, an arbitrage fund, or an early individual investor remains unverified by public information. Therefore, the relationship between its actions and future market trends can only be discussed in terms of historical correlations and cannot be interpreted as a definitive signal.

Divergence in Allocation Preferences

Aside from Bitcoin and Ethereum, many DATs chose to allocate a large proportion to altcoins during the last upward cycle in pursuit of higher returns, a strategy that is now being re-evaluated. Altan Tutar, CEO of MoreMarkets, bluntly stated that DAT companies focusing on altcoins will be the first to exit, citing that altcoins generally exhibit characteristics of weak liquidity, opaque fundamentals, and extreme volatility, making them prone to a "price-liquidity death spiral" under the combined pressure of redemptions and margin calls. In contrast, Bitcoin is increasingly viewed by more institutions as the core base of "digital capital," while altcoins resemble high-volatility tactical positions. For DAT, how the asset pool reallocates between high liquidity assets like BTC and high volatility exposures in altcoins will directly determine the stability of mNAV and the trajectory of drawdowns. Considering that Bitcoin has been in a continuous decline since peaking in October 2025, with the entire market entering a downward or oscillating cycle, DAT faces not only net value drawdowns but also psychological pressure and redemption pressure from clients regarding heavy altcoin strategies. The rebalancing of the asset pool and risk reduction will be concentrated during this phase, and the trend of "tilting towards Bitcoin" in allocation preferences is expected to be further strengthened.

Survival and Turning Point

In summary, the current information indicates that the DAT industry has clearly shifted from a phase of discussing growth prospects to a "survival verification period" that requires proving its value through real returns, stable liquidity, and transparent risk control. On one hand, the stock price corrections of leading companies, the enhanced ETF substitution effect, and executives' pessimistic statements about the outlook for 2026 have collectively compressed the industry's valuation premium space; on the other hand, the whale's withdrawal of 2,218 ETH and total holdings of 2,738 ETH remind the market that, amid increasing systemic uncertainty, large funds tend to prefer actively managing their risk exposure. In this landscape, the key factors determining the order of DAT liquidation are shifting from a single scale ranking to multiple dimensions: whether the safety boundary of mNAV can be maintained during a downturn, whether the asset structure tilts towards high liquidity assets like Bitcoin, and whether product design can differentiate itself from crypto ETFs in terms of fees, transparency, and strategy diversity will directly impact who can navigate this round of adjustments. It is important to emphasize that the claims regarding the "DAT industry being highly correlated with the peak correction of Bitcoin in October 2025" and certain research institutions defining 2026 as the "year of survival" are still in a state of verification and lack systematic data support. A cautious attitude should be maintained regarding such conclusions, and continuous tracking of subsequent on-chain data, financial reports, and regulatory developments is necessary to make judgments about the true turning point of the industry.

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