Digital asset treasuries (DATs) were among the most visible corporate phenomena of the last bull cycle. Built on the premise that holding Bitcoin on the balance sheet was itself a value-generating strategy, with many attracting large market premiums simply by accumulating BTC faster than their competitors.
But as valuations normalize and net asset values (NAVs) tighten, DATs are discovering that passive exposure may no longer be enough.
“There has been this collective awakening as net asset values start to decline,” Matt Luongo, co-founder and CEO of Bitcoin financial platform Mezo, told CoinDesk in an interview. “Most of them don’t really have an advantage over others in buying bitcoin – you can do it yourself. Now they have to earn yield and deploy strategies that retail may not yet know about.”
Some DATs that have exploded in the public markets now face a different environment: one in which investors increasingly expect operational performance or revenue generation, not just BTC appreciation. Even major Bitcoin strategy companies have faced similar pressures. Across the category, the argument that simply holding bitcoin is no longer the complete business model has strengthened.
Brian Mahoney, co-founder of Mezo, adds that DATs also face a narrative constraint. “These companies want the returns that exist in ecosystems like Ethereum or Solana, but they can’t get there,” he said. “This is a violation of the story they told shareholders. You cannot claim to be a native Bitcoin treasurer while earning your return from ether. staking.”
A new institutional question: what can Bitcoin do?
Anchorage Digital, the federally chartered crypto bank that serves institutions from hedge funds to public companies, is seeing a shift in the type of questions customers ask.
“If all you want is price exposure, there are many ways to achieve that,” said Nathan McCauley, CEO of Anchorage Digital, in an emailed comment. “But institutions increasingly want their Bitcoin to be productive – to earn rewards, unlock liquidity, or serve as collateral. They want infrastructure that allows them to interact with the Bitcoin economy directly, securely, and in full compliance.”
Through Anchorage Porto’s self-custodial wallet, customers lock up BTC to earn on-chain rewards or borrow against their holdings. “We enable institutions to use bitcoin without selling it, without entering unregulated environments, and without compromising custody,” McCauley said.
BTCFi’s growth – from a total value of around $200 million locked in last October to a peak of around $9 billion in early October – reflects growing interest, but McCauley notes that it’s still a “drop in the ocean compared to the total supply of bitcoin.”
Early adoption models
McCauley sees three categories of institutions emerging as early adopters: hedge funds and multi-strategy firms seeking directional returns; asset managers and DATs holding large BTC reserves; and crypto-native funds that want to access BTCFi without building their own infrastructure.
Within these groups, he sees consistent requirements: “predictable economics, clear guarantee mechanisms and fully explainable risks”. The first offering through Porto – borrow against BTC at a fixed rate on Mezo – fits this profile, with staking to follow, he said.
The coming inflection point
The next 12 to 24 months could mark a significant acceleration in BTCFi participation if several structural elements come into place.
“The inflection point comes when complexity disappears,” McCauley said. “When institutions can activate their bitcoin through familiar custody, compliance and settlement workflows rather than creating parallel systems.”
It identifies three scaling factors: regulatory clarity, conservation integration, and risk frameworks that align with institutional thinking. “When these elements align,” he said, “you could easily see tens of billions of institutional BTC move from passive holding to productive deployment.”
Luongo believes this change is already happening behind closed doors. Conversations with industry CEOs, he said, reflect a sense of urgency driven not by price but by competitive pressure. “The big banks that we thought would move slowly are coming in six to 18 months,” he said. “Behind the scenes, transactions are happening quickly.”
Mahoney sees fintech convergence as another accelerator: traditional financial front ends connecting to tokenized rails, with users interacting with crypto without realizing it.
A new partnership between Anchorage Digital and Mezo offers institutions a path to BTCFi. Thanks to Porto, institutions can now borrow against their BTC using Mezo’s MUSD stablecoin at fixed rates starting at 1%.
Borrowing through MUSD goes live today, while veBTC rewards will roll out to the broader Porto and Anchorage platform soon.
