Digital asset treasury companies (DATs) are moving into a consolidation phase as competition intensifies, according to David Duong, Coinbase’s head of investment research.
Speaking to Cointelegraph, Duong said companies will increasingly consider mergers and acquisitions as part of strategies to enhance share prices and survive the next stage of the market cycle.
“Companies may start to pursue mergers and acquisitions, much like the recent Strive and Semler Scientific deal, as we approach the more mature phases of the DAT cycle,” Duong explained.
Asset manager Strive, which shifted into becoming a Bitcoin treasury company, announced on September 22 that it would acquire fellow DAT Semler Scientific in an all-stock transaction.
Expansion of Crypto-Native Strategies
Duong noted that DATs are simultaneously embracing more crypto-native tactics to generate revenue.
These include staking and DeFi looping — a strategy where the same asset is repeatedly borrowed and repositioned to amplify returns.
“And there’s still a lot more they can do here,” Duong said.
“I think the future will depend a lot on what happens with regulatory shifts, liquidity and market pressures to get a clearer sense of where this could all go long-term.”
On September 15, Standard Chartered predicted that not all DATs would survive in the long term, which could force companies to innovate or fade from the market.
Competition to Dominate Tokens
Duong and Coinbase researcher Colin Basco wrote in a September 10 report that the DAT race has entered a “player-vs-player” stage.
Firms are competing to differentiate themselves, often by trying to dominate holdings of specific tokens or employing aggressive financial tactics.
Recent share buybacks illustrate this trend.
Trump Jr.-linked media company Thumzup, which holds Bitcoin and Dogecoin, boosted its share repurchase from $1 million to $10 million on September 24.
Solana treasury firm DeFi Development Corp expanded its buyback program from $1 million to $100 million.
“I believe where this is coming from is that companies are under the impression that only a handful of major players will dominate each token, and they are competing to differentiate themselves through either size or financial engineering,” Duong said.
“I also think this strategy likely contributed to the negative price action observed in mid-to-late September, as these entities prioritized using capital to boost stock prices over accumulating crypto.”
Share Buybacks Not Always a Positive
Many DATs have struggled to maintain share prices, with some losing as much as 90% of their value amid market saturation and investor doubts about sustainability.
Duong warned that buybacks may not always produce the intended effect.
“The effectiveness of buybacks hinges on investors’ perceptions of a company’s underlying fundamentals,” he said.
“For instance, if a DAT is using buybacks as a defensive maneuver to reduce its float, but market players think the company retains an efficient capital allocation strategy and transparent funding, then its share price may benefit. Conversely, the reverse is true when the right conditions aren’t met.”
TON Strategy Company, formerly Verb Technology Company, announced a stock buyback on September 12, but shares fell 7.5% afterward, showing the risks.
Significant Crypto Holdings
Despite these challenges, DATs hold vast quantities of cryptocurrency.
Companies with Bitcoin on their balance sheets collectively own more than 1.4 million coins, representing about 6.6% of total supply and worth over $166 billion.
At the same time, 68 companies have amassed a combined 5.49 million Ether valued above $24 billion.
Solana has also seen rising interest, with nine publicly tracked entities holding over 13.4 million tokens worth more than $3 billion.
These large positions reflect the scale of the competition — and the high stakes — for treasury companies looking to survive the next phase of the market.