Welcome to the institutional newsletter, crypto long and short. This week:
- Zigchain’s Abdul Rafay Gadit Already written as venture funding wanes, Digital Asset Treasury Companies (DATCO) are reinventing corporate finance by turning balance sheets into active capital engines, proving that the future of institutional crypto lies in on-chain productivity, transparency and governance—not speculation.
- Coindesk’ indexes Andy Baehr Provides a “vibe check,” providing a look back at crypto rates and a look ahead at signs of strength as the country emerges from the government shutdown.
- In the “Chart of the Week”, we analyze Ethereum dex volumes and UNI token price.
– Alexandra Levis
The Rise of Datcos: Active Treasuries replace VC in crypto
– Neither Abdul Rafay Gaditco-founder, zigchain
For years, corporate treasuries in crypto were little more than imaginary balance sheets. The strategy is simple: buy bitcoin, hold and hope. That passive model, thanks to MicroStrategy, has now been displaced by a new class of participants: Digital Asset Treasury Companies (DATCO), which act more like venture capital firms than custodians.
This change is happening because the traditional Crypto funding model has stalled. Venture Capital Investment fell 59% in the second quarter of 2025 at $ 1.97 billion, its lowest level since 2020. However the amount of crypto held on corporate balance sheets has never been higher: public companies now own more than a million Bitcoins, almost 5% of the supply. What began as a store of value became a pool of productive capital.
Datcos shows how this change works in practice. Instead of just holding digital assets, they actively invest them in staking, validator operations and ecosystem development. Across Europe and Asia, publicly listed datcos are allocating significant portions of their wealth to blockchain participation, earning on-chain yields while supporting network infrastructure. The move is not just diversifying exposure but also generating yield and strengthening the networks that support the digital-asset economy.
This approach reflects a broader redefinition of corporate finance in the blockchain era. By using programmable assets, datcos can automate Treasury participation, distribute returns transparently and measure risk in real time – functions required by entire departments in traditional finance. It also creates a new feedback loop between the networks and their investors: when assets stand up, prove or provide liquidity, they not only earn a yield but also contribute to the stability and scalability of the ecosystem itself.
The implications extend beyond balance sheets. By running validators and funding ecosystem growth, DATCOs gain both influence and insight into emerging protocols – Advantages once reserved for venture capital.
Regulators and institutions are starting to take notice. An active Treasury model that combines transparent on-chain operations with yield generation could mark a turning point in how public companies interact with digital assets. For auditors and compliance teams, the appeal lies in traceability: every transaction, validator reward and allocation is verified on-chain. This visibility provides a framework for regulated participation, bringing structure to a space defined by opacity.
As VC funding recedes, DATCOs are quietly becoming the new backbone of the crypto industry – less speculative, more participatory and potentially more stable. Balance sheet exposure age ends. In its place is a model where capital works alongside code – where the most successful wealth is those that help build the networks they own.
while we wait (ed)
– Neither Andy Baehr, CFA, Head of product and research, Coindesk indexes
When Bitcoin perma-bulls recalibrate, we know the bottom is near, right? On November 5, Galaxy’s Alex Thorn published a note Took price target to $120k from $185k. The following day, Cathie Wood took her 2030 target from $1.5 to $1.2 million. Bitwise’s Matt Hougan maintains his call for a Q4-Into-Q1 rally, but not one that will ring the $200K bell he once predicted. NB: We do not call the bottom or make price predictions. However, the prospect of the government reopening (really … little to cheer us up) has prices sinking and our thoughts turning to … what’s next?
We can start with some observations about rates. The Fed recently carried out the largest injection of liquidity since the 2020 pandemic: $ 125 billion in total, including a record $29.4 billion single-day operation on October 31 through a standing repo facility. Bank reserves fell to $2.8 trillion (the lowest in 4 years) due to QT and compounded by the shutdown. Sofr went down, and not without drama. CDOR. Only in the last observation does the difference appear: the SOFR is lower while the cdor is higher. Since CDOR rates (and the variable AAVE borrowing rates on which they are based) are driven solely by the use of AAVE lending pools, a higher rate usually means one of two things: 1) lenders are taking because better opportunities exist and/or 2) borrowers are coming in quickly, sensing, again, good opportunities. It is interesting – but completely understandable – to see sofr dart lower and cdor dart higher at the same time.
CesrThe composite ether staking rate, is a benchmark for Ethereum validator rewards that we have been calculating for more than two years. Its stability reflects the post-merge and layer-2 maturity afforded by the Ethereum ecosystem. That stability, however, masks the ever-increasing daily transactions on Ethereum’s mainnet (StableCoins, tokenized assets) that have been at the center of this year’s crypto-backed narrative. Cesr’s stability also seems to have passed the hubbub of lengthening exit queues, serving as ETH’s equivalent of “OG Bitcoin Whale Selling!!” Alarms.
What these observations remind us is that for the next leg of Crypto to maintain the quality we saw in Q2 and Q3, the main growth blockchains (ETH, SOL, etc.) have to lead the way. (SOL ETF flows in a soft tape are a good sign here.) More (and more) crypto ETFs will hit the market soon, pleasing loyalists and traders. In (exciting, thrilling) noise, we will look for more signs of allocation In this asset class, the fast money chases the slow.
Chart of the week
This week, we analyze Ethereum dex volumes and UNI token price – in the context of the proposal by unification around the activation of the fee switch for the protocol. Essentially, the protocol seeks to take a cut of the LP fees and use that revenue to buy back and burn the UNI token. Coindesk Research estimates that with current projections, the protocol is likely to earn $300m in annual fees – just putting it behind the hype and pump in terms of token purchases. The price of UNI/USD is broadly correlated with Ethereum Dex volumes – the recent divergence provided an interesting opportunity but it seems to be closing given the surge in uni price. Uniswap as a proxy bet on Ethereum post This proposal may continue to be widespread but there are concerns around increased competition, as covered by Coindesk Research here.
