BLUF*
Treasury companies are wolves in ETF clothing.
Bitcoin exposure at zero premium. Bitcoin ETFs, or actual Bitcoin. 160+ Digital Asset Treasury companies are charging close to 40% markups to hold it for you.
Bad to worse? All of our index funds bought in
*Bottom Line Up Front
Good afternoon,
Imagine paying $140,000 for some sort of XBTC that gets you $100,000 in Bitcoin...only because XBTC has Elon Musk's name on it.
But that's exactly what 160+ companies are doing right now—selling Bitcoin at a 40% premium...But why? Because for these companies, it looks like an infinite money glitch.
TBH it’s BS... but even if you don't buy in, your index funds will.
Best,
Austin Campbell
Teaching Blockchain & DeFi at NYU
Talking to institutions at Zero Knowledge
ZERO IN
WHAT’S DAT?
Digital Asset Treasury (DAT)
Publicly traded company that: incorporates, hires management and a board, adheres to corporate reporting requirements and holds tokens.
WHO DAT?
MEET THE OG Michael Saylor founded MicroStrategy—a boring company for business intelligence software .
→ Then in August 2020, Saylor discovered Bitcoin at $12,000. Businessman? No. Born-again Bitcoin stan.
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COPY DAT
Companies' CEOs watched MSTR's stock moon. Saw Saylor raising cash, cashing out shares to stack more Bitcoin. Rinse. Repeat. Copycats flooded in.
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| And the spin? They're not abandoning their core business—just "optimizing treasury management" or "hedging dollar debasement." |
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Bad deal. Basically, investors (and index funds!) are overpaying these guys to hold your Bitcoin, only to dilute you with debt and equity raises.
WHY BUY DAT
Before January 2024? DATs made sense. No Bitcoin ETFs meant GBTC or MicroStrategy were your only plays. Now?
DAT'S LEGIT?
REASON 1: TAX DODGING
Corporate instrument can beat asset holdings.
REALITY: Sometimes (for some people). For most? No tax reason.
REASON 2: BERKSHIRE MODEL
DAT could assume a business model offering strategic exposure to diversified digital asset mix which includes active management leading to long term best outcomes for investors (benefiting from ongoing growth + yield)
BUT WHO?: Prove me wrong but mostly, DATs aren't doing this.
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REALITY CHECK
DAT'S LEGIT
Reason 1. TAX EFFICIENCY
Corporate structure beats personal holdings in some jurisdictions
TEST: Is the company optimizing for tax value? Or just riding hype?
Reason 2. BUSINESS MODEL
(Like BERKSHIRE HATHAWAY) Business model offering strategic exposure to a digital asset mix - legitimate business growth, yielding cash flow - not just holding tokens
Diversified digital asset conglomerate? DAT could work. But no DATs are doing this.
Most DATs are neither tax-optimized nor operating businesses but expensive boxes of Bitcoin (a middleman adding no - or at best, negligible- value; billing you Bitcoin exposure at a ~40% premium to Bitcoin)
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DAT CAN CRASH
The Death Spiral → DAT Crash
Remember GBTC?
2021: 120% premium flipping to -30% discount overnight
Nic Carter called it: "Like betting the GBTC premium trade lasts forever"
I've seen this movie. When everyone discovers the same "infinite money glitch" at the same time, it's not a glitch—it's a trap.
MicroStrategy uses zero-coupon convertibles to buy more Bitcoin.
Financial engineering does not create value on its own. The value will accrue to lawyers and distressed debt investors.
This is mass hallucination. MSTR worked for exactly one year pre-ETFs. Now? Buy actual Bitcoin in your Fidelity account. Zero premium. What the hell are these fees for when FBTC exists?
BET AGAINST DAT
Jim Chanos—Wall Street's most famous short seller. This is the guy who spotted Enron's fraud when everyone else saw genius. Called the housing crash. His track record on bubbles is unmatched.
Chanos' play now? Long Bitcoin, short MicroStrategy.
"We're buying for $1, selling for $2.50," he told CNBC. "I don't know if Bitcoin hits $100k, a million, or $10k. But shorting $1 for $2.50? That's profitable."
BACK DAT ASSET UP
Treasury companies are sneaking into indexes. MSTR joined the NASDAQ-100. Your 401(k) auto-buys it.
RISK TO REKT
It starts subtle—a few basis points in a massive basket. Harmless, right?
Then reality hits: Mom's IRA holds overpriced Bitcoin proxies. Teacher pensions ride crypto volatility they never signed up for. The blast radius isn't just crypto degens anymore—it's everyone.
ZERO INSIDER
AUSTIN
Debated Omid Malekan (Columbia Blockchain professor) on the Bankless podcast Is Ethereum's ready for Real World Assets? Omid and I went through every stress test—hacked exchanges, broken stablecoins, court orders on-chain.
DAVID
Just broke down the Roman Storm verdict on the Blockworks podcast. If you think your company, or any company in our space, is safe from regulators, wait until you hear me talk about what the Tornado Cash precedent means for us.
ZERO OUT
MOSTLY, F*** DAT
DATs that just exist to own digital assets and then sit around or use leverage to own more? F*** that. Buy an ETF. Or buy the assets themselves.
Want Bitcoin? Buy Bitcoin. Or buy a Bitcoin ETF.
Want to pay 40% extra for someone else to buy Bitcoin for you? Buy a treasury company.
Want to watch your retirement evaporate when the music stops? Do nothing—your index fund already bought them for you.
The market can stay stupid longer than you can stay solvent. But it can't stay stupid forever.
1 More curiosity? Read our deep dive on these Digital Asset Treasury companies at Zero Insights.
2 Missed out? Read letters 005 on Tornado Cash, 004 on DeFi Doomers, 003 on the GENIUS Bill.