Encryption treasury craze: governance innovation or the next capital play people for suckers?

Are investors' interests in digital asset treasury companies based on robust long-term strategies or merely speculative bets on asset appreciation? This article is derived from a piece written by Jeff Gapusan for Forbes, organized, edited, and authored by ForesightNews. (Background: The winds have changed! Bloomberg reports Wall Street "questions the DAT narrative": the stock price of Strategy plummets, and the market loses confidence in crypto hoarding.) (Background Supplement: Ethereum DAT treasury strategy company "When to sell ETH": six scenarios to preview for you.) In August 2020, a business intelligence (BI) software company, which is also a highly regarded internet company, adjusted its business model to make Bitcoin acquisition its core treasury reserve asset. This move not only significantly enhanced the company's visibility but also propelled the development of the term "DATCO" (digital asset treasury company). Since then, Strategy Company (formerly MicroStrategy) has gained fame in the financial and cryptocurrency sectors, becoming a household name. Michael Saylor, co-founder and executive chairman of Strategy Company, led the company's strategic layout into the Bitcoin field in August 2020. Photographer: Ronda Churchill / Bloomberg. Traditional capital management concepts consider that the functions of a corporate treasury department are limited to managing cash, bonds, and other fiat currency assets, while the rise of digital asset treasury companies challenges this perception. As the popularity of digital assets increases, corporate treasury departments begin to contemplate: should they include digital assets in their investment portfolios, or even as the core of the portfolio? This transition has given rise to a new type of publicly listed company — digital asset treasury companies (DATCO), attracting widespread attention in the fintech sector. In an article earlier this month in Forbes, Coinfund President Chris Perkins dubbed the summer of 2025 as the "summer to remember for DAT." However, as market enthusiasm rises, a key question emerges: are investors' interests in these companies based on robust long-term strategies or merely speculative bets on asset appreciation? The Transition of Strategy Company to DATCO MicroStrategy, founded by Michael Saylor in 1989, was an early participant in the business intelligence field, primarily providing data analytics software to assist corporate decision-making. The company went public in 1998, and by early 2000, Saylor had become one of the wealthiest individuals in Washington D.C. MicroStrategy was a star company during the dot-com bubble, and despite early controversies, it did not regain its former glory but maintained a successful software business. In March 2000, the company's fate took a turn: due to accounting errors, the company was forced to restate its financial performance for the previous two years. Following the announcement, its stock price fell 62% in a single day, and the SEC immediately launched an investigation, causing Saylor’s personal net worth to shrink by billions of dollars. After the dot-com bubble burst, MicroStrategy became a "respected but unremarkable" enterprise software company over the next 20 years: while it continued to profit from software sales, it faced fierce competition from industry giants like Microsoft and Oracle. Although Saylor remained at the helm of the company, its influence had diminished significantly compared to the peak of the bubble. In August 2020, Saylor led Strategy Company in its transition to DATCO: investing $250 million to acquire over 21,000 Bitcoins. As of September 15, 2025, the company held nearly 640,000 Bitcoins, valued at $47.2 billion. During the same period, Strategy's market capitalization grew over 2700% (annual growth rate of 92.0%), attracting widespread attention and expectations from the financial and fintech communities. Seeking Permanent Capital For readers unfamiliar with DATCO, it can be likened to "permanent capital vehicles (PCV)" in the energy infrastructure and real estate investment sectors — such as master limited partnerships (MLP) or real estate investment trusts (REIT). Similar to these tools, DATCO offers investors a more unique and advantageous way to invest in long-term illiquid assets. Master limited partnerships (MLP) have always been the core financing structure for energy and infrastructure project investments. (Image source: Getty Images) There are many reasons why operating companies favor permanent capital. For industries that require long-term nurturing to generate value, permanent capital is seen as "patient capital": unlike traditional private equity or venture capital funds (which typically have a fixed duration of 7-10 years), permanent capital vehicles (PCV) are designed to "exist perpetually" (i.e., a "evergreen" structure), allowing issuers and companies to align operational pace with the long-term growth of underlying investments. Structural Advantages of Permanent Capital Vehicles The emergence of permanent capital vehicles is driven by market demand for "investment structures that better align with the nature of long-term value creation" (especially in private markets). They provide investors with a more stable, patient, and flexible way to access high-potential assets. These tools allow investors to access private equity, private credit, real estate, and other "niche or illiquid private market assets" — assets that were mostly only accessible to institutional investors in the past. Although more investors can now more easily enter the digital asset market, ordinary investors still find it difficult to make choices given the multitude of products and complex participation methods. Regarding investor subscriptions and redemptions, permanent capital vehicles also offer greater flexibility (e.g., opening liquidity windows quarterly or annually) — this is a core advantage compared to traditional private equity funds: traditional private equity funds typically require investors to lock in their funds for the entire duration. For fund managers and corporate executives, a stable and continuous source of funding allows them to escape the cycle of "frequent financing" and focus on business management, investment operations, and revenue generation, thus enhancing the company's ability to withstand short-term market fluctuations. Management can make decisions based on long-term strategies rather than reactively responding to immediate market pressures. The Uniqueness of DATCO The core definition of digital asset treasury companies (DATCO) is: a publicly traded company that "strategically holds a large amount of digital assets on its balance sheet" as its core business function. Unlike traditional companies that "only hold a small amount of cryptocurrency as ancillary investments or operational tools," DATCO's business model revolves entirely around the accumulation and management of digital assets. The pioneer in this field, MicroStrategy, converted its cash reserves into Bitcoin in August 2020, setting a benchmark for subsequent companies. The uniqueness of DATCO lies in its "dual attributes": it is both a publicly traded company and a capital market tool that allows investors direct access to specific digital assets. For investors, this offers an extremely attractive alternative — without needing to directly hold digital assets or hold them via ETFs, but rather indirectly invest through DATCO. Investing in DATCO is seen as a "high beta, leveraged alternative investment" to the underlying assets, allowing investors to gain amplified asset exposure through a familiar equity structure. This model is built on...