Solana DATs: Taking a Page Out of Saylor’s Strategy

The crypto industry has entered 2025 with several tailwinds, particularly in terms of institutional recognition and adoption. According to recent surveys, a striking 86% of institutional investors now either hold digital assets or plan to allocate funds to them this year, with nearly 60% committing over 5% of their assets under management to cryptocurrencies.

Recently, Solana-focused Digital Asset Treasuries (DATs) have emerged as a particularly attractive vehicle within this wave of institutional capital. Solana’s relatively lower market capitalization compared to Bitcoin and Ethereum, combined with its high staking yields that lock up a substantial portion of circulating supply, creates a distinct value proposition.  

This suggests that institutional investors' capital may have a greater impact on Solana’s price movements compared to BTC or ETH. Some view this as very bullish for Solana, while others remain skeptical for reasons we’ll discuss in this article.

What is a Digital Asset Treasury (DAT)?

A Digital Asset Treasury (DAT) is a corporate strategy or entity that focuses on raising capital and holding digital assets, primarily cryptocurrencies, as a significant part of its treasury holdings.

Unlike traditional treasury management, which typically centers on cash, bonds, and fiat assets, a DAT allocates a portion or majority of its balance sheet to digital assets like Bitcoin, Ethereum, Solana, stablecoins, and other cryptocurrencies.

Many of the leading DATs today are publicly traded companies that have not only embraced Bitcoin but expanded their treasury strategies to include a variety of digital assets. For example, Strategy (formerly MicroStrategy) holds one of the largest Bitcoin treasuries in the world and continues to raise capital to acquire more BTC.

However, newer entrants such as SharpLink Gaming, BitMine Immersion Technologies, and Tron Inc. have broadened their focus to include Ethereum, Solana, Tron, XRP, BNB, and others.

Why DATs?

In a world where crypto ETFs exist, allowing anyone to invest in Bitcoin, Ethereum, and other altcoins, why are DATs suddenly the talk of the town?

As Lyn Alden pointed out, not all institutions can buy ETFs or custody crypto due to various regulatory reasons.

For example, some stock funds allow the portfolio manager to buy only stocks, excluding bonds, ETFs, commodities, or other assets. Likewise, there are bond funds where managers are restricted to purchasing only bonds. Some mandates are even more specific, such as managers restricted to healthcare stocks or non-investment-grade bonds.

DATs fill a very specific purpose and niche, allowing companies and investors to gain exposure to digital assets through the equity (via buying shares) of the DAT company without directly holding or securing the assets themselves.

The strategy behind Strategy

Whether you hate him or love him, Michael Saylor is the godfather of DATs. Back in 2020, Strategy became the first publicly traded company to convert a substantial portion of its cash reserves into Bitcoin (At the time it was trading around $11,650).

The success behind Saylor’s Strategy (pun intended, sorry) hinges on issuing debt to acquire more BTC. Currently, Strategy is the largest publicly traded company with BTC on its balance sheet, holding over $28 billion in unrealized profit, with its BTC holdings valued at over $70 billion at current market prices.

All DATs, including Strategy, employ a capital strategy to raise money from investors at a higher value (premium) than the actual cryptocurrency they hold. They then use that capital to purchase more cryptocurrency per share of their stock, essentially leveraging up their holdings.

The cycle goes like this:

1. Company raises millions to accumulate coins
2. Company accumulates said coins
3. Company’s aggressive accumulation of coins drives prices higher
4. Coin’s price appreciation boosts Company’s NAV(net asset value)
5. Company’s valuation increases in relation to growing NAV
6. Company raises more funds against its growing valuation
7. Repeat

This process, when done well, helps increase the value of each share and attracts more investors, creating a positive cycle. Two popular ways DATCOs raise capital are At-the-Market (ATM) programs and Private Investments in Public Equity (PIPE).

With the core strategy driving the multi-billion-dollar race to acquire all the coins and market them to boomers, let’s examine the recent developments, especially Solana DATs.

Solana DATs in 2025

The main focus of this write-up is, of course, the recent wave of announcements about Solana DATs.

Several recent large fundraisers have been announced to purchase Solana (SOL) tokens. The most notable include:

• Galaxy Digital, Multicoin Capital, and Jump Crypto are raising approximately $1 billion together to create a Solana treasury, supported by the Solana Foundation and with Cantor Fitzgerald as lead banker.
• Sharps Technology, a Nasdaq-listed company, closed a $400 million private placement with major digital asset investors, potentially raising up to $1 billion if all warrants are exercised. This capital will mainly acquire Solana tokens, with the Solana Foundation also planning to sell $50 million in SOL at a discount.
• Pantera Capital announced an initiative to raise up to $1.25 billion to convert a Nasdaq-listed company into a dedicated Solana treasury.
• Additional smaller public companies like Upexi and DeFi Development also hold significant Solana positions worth hundreds of millions of dollars.

The series of announcements has stirred up the community, dividing people into two groups: those who view it as an exit strategy for VCs and those who believe it’s a net benefit to the asset. As always, the world is not black and white and requires nuance.

The primary concern from the first camp centers on the idea that it offers investors and large holders a quicker exit strategy and will not affect the SOL market dynamics. I’ll leave Mert to address this:

The bull case, however, can be clearly made when we compare Solana to the big dogs. Firstly, Solana is at a much lower valuation than ETH or BTC, with circulating market cap sitting at $104 billion vs $540 billion and $2.19 trillion, respectively.

Alongside, due to the relatively high yield that Solana offers to stakers, roughly 350 million, or almost 60% of the total supply, is locked up in staking, making it much easier to move the needle with the remainder of the circulating supply.

Taken from a much more intelligent gentleman’s thread:

“What this means is that a dollar spent on a SOL DAT is like $5 on an ETH DAT or $22 on a BTC DAT when looking at relative valuations when you factor in the circulating supply amounts with staking.”

As Mert mentioned, we can't yet be sure how each company will arrange its debt or locked token purchases. However, my simpleton thinking is that this instrument should be positive for an asset when looking at the situation with BTC and Saylor.

Concluding thoughts

If you're familiar with Terra’s Anchor days, you’d realize that the strategy these DATs use closely resembles how we leveraged LUNA. We bought LUNA to get UST, then used UST to buy even more LUNA. As the price of LUNA increased, we used the newly available LTV to continue the cycle. And look at where that led us.

I will not be the first to say that strategies like the DATs are raising systemic risk across the industry due to their reflexive nature, which amplifies their effects during both upward and downward market movements.

On the rise, they offer leveraged exposure to the underlying asset. However, when things go downhill, they heighten the chances of widespread sell-offs as company premiums turn into discounts. This situation may force companies to resort to share buybacks, selling the only available resource on their balance sheet - crypto.

The key takeaway is that, for the foreseeable future, we're likely to experience a celebration so spectacular that it might seem unstoppable. So enjoy the ride while the music blasts, but make sure you're not the last to leave when the first red light ends the party.