Digital Asset Treasury Companies: What Are They and How Do They Work?

Digital Asset Treasury Companies (DATCOs): What Are They and How Do They Work?

Digital Asset Treasury Companies (DATCOs) are revolutionizing the cryptocurrency market by allowing companies to manage and accumulate digital assets instead of relying solely on traditional assets such as cash and bonds. These entities optimize investor access to the potential of crypto assets, positioning themselves as a professional and regulated alternative in the acquisition of Bitcoin, Ethereum, and other digital assets.

What are Digital Asset Treasury Companies?

DATCOs emerge as a response to the need for companies to adapt in the digital world. Unlike traditional investment firms that manage external funds, DATCOs raise capital directly for the purpose of buying and holding digital assets. In this way, an investor can acquire shares of a listed company whose main asset is cryptocurrencies, thus facilitating their exposure to this market without directly interacting with the exchange platforms.

• Asset accumulation: DATCOs acquire Bitcoin, Ethereum, and other cryptocurrencies, using the capital raised through their public offering.
• Stock movements: The price of a DATCO’s shares generally fluctuates based on the value of its digital assets.
• Revenue models: They generate revenue through staking rewards, asset lending programs, and strategic partnerships.

How Does a DATCO Work?

The operation of DATCOs is innovative and departs from the traditional investment model. The company goes public, raises funds, and with those resources, acquires digital assets that it then manages directly. In addition, this model allows for additional income through:

• Staking rewards: Increase performance by securing proof-of-stake networks.
• Loan programs: Lending crypto assets to institutions in exchange for interest.
• Strategic partnerships: Collaborating with blockchain projects and DeFi protocols.

Benefits of Digital Asset Treasury Companies

DATCOs offer advantages to both institutional and individual investors. For institutions, they facilitate the indirect acquisition of cryptocurrencies, while retail investors can benefit from security and regulatory compliance without the need to manage private keys or understand complex DeFi protocols. In addition, they act as promoters of the chosen digital assets, which fosters institutional confidence and wider use in society.

Examples in the Market

Within the sector, companies such as Strategy, which owns more than 632,000 Bitcoin, and Bit Digital, which has focused on Ethereum, accumulating more than 121,000 ETH, stand out. Another relevant company is TON Strategy Co, a pioneer in managing Toncoin as a treasury asset, accumulating more than 713 million in this asset and playing a key role in the validation of the network.

DATCO Revenue Models

DATCOs diversify their income through various channels, strengthening their resilience against market fluctuations. The following strategies are common:

• Participation in staking: They offer annual returns ranging between 3.5% and 8%.
• DeFi Loans: Generate interest by providing liquidity to institutional borrowers.
• At-The-Market (ATM) Programs: They sell shares when they are at a premium price, to acquire more cryptocurrencies without diluting existing ownership.

Future of Digital Asset Treasury Companies

The growth of DATCOs is projected to continue until 2028, driven by increasing institutional adoption and maturity in regulatory frameworks. Likewise, a greater concentration in the sector is anticipated, where companies with solid balance sheets will be in a better position to acquire competitors with financial problems.

DATCOs have become vital tools that enable the adoption of cryptocurrencies in the institutional sphere, guaranteeing professional management, regulatory compliance, and amplified exposure to a dynamic ecosystem.

For more information about DATCOs, visit TON Foundation.