Digital asset treasuries (DATs) were among the most visible corporate phenomena of the last bull cycle. Built on the premise of having bitcoin in the balance was itself a value-generating strategy, many attracted strong market premiums simply by accumulating BTC faster than their competitors.
But as valuations normalize and net asset values (NAVs) adjust, DATs are finding that passive exposure may no longer be enough.
“There has been this collective understanding as NAVs start to come down,” 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 anyone when it comes to buying bitcoin; you can do it yourself. Now they need to get returns and implement strategies that retail may not know about yet.”
Some DATs that boomed in public markets now face a different environment: one in which investors increasingly expect operational performance or revenue generation, not just BTC appreciation. Even corporate leaders of the bitcoin strategy have faced similar pressure. Across the category, the argument has strengthened that simply holding bitcoins is no longer the entire business model.
Brian Mahoney, co-founder of Mezo, adds that DATs also face a narrative limitation. “These companies want the returns that exist in ecosystems like Ethereum or Solana, but they can’t get there,” he said. “It’s a violation of the story they’ve told shareholders. You can’t claim to be a native Bitcoin treasure while earning your return on ether. bet.”
A new institutional question: what can Bitcoin do?
Anchorage Digital, the federally chartered crypto bank that serves institutions ranging from hedge funds to public companies, is seeing a shift in the types of questions customers ask.
“If all you want is price exposure, there are plenty of ways to get it,” Anchorage Digital CEO Nathan McCauley said in an emailed comment. “But institutions increasingly want their bitcoins to be productive: to earn rewards, unlock liquidity, or serve as collateral. They want an infrastructure that allows them to interact with the Bitcoin economy directly, securely, and in full compliance.”
Through Anchorage’s self-custody wallet, Porto, customers lock BTC to earn on-chain rewards or borrow against their holdings. “We are allowing institutions to put bitcoin to work without selling it, without entering unregulated environments and without compromising custody,” McCauley said.
BTCFi’s growth (from around $200 million in total value locked last October to a high of around $9 billion in early October) reflects growing interest, but McCauley notes that it is still “a drop in the ocean compared to the total supply of bitcoins.”
Early adoption patterns
McCauley sees three categories of institutions emerging as early adopters: hedge funds and multi-strategy firms seeking directional performance; asset managers and DATs holding significant BTC reserves; and crypto-native funds that want access to BTCFi without building their own infrastructure.
In all of these groups, he sees consistent demands: “predictable economics, clear guarantee mechanisms and fully explainable risk.” The first offering through Porto (borrowing against BTC at a fixed rate on Mezo) fits that profile, and bets will follow, he said.
The next turning point
The next 12 to 24 months may mark a significant acceleration in BTCFi participation if several structural pieces fall into place.
“The tipping point comes when complexity disappears,” McCauley said. “When institutions can activate their bitcoins through familiar custody, compliance and settlement workflows instead of building parallel systems.”
It identifies three scale drivers: regulatory clarity, custody integration, and risk frameworks that align with institutional thinking. “When those pieces align,” he said, “you can 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 CEOs in the space, he said, reflect a sense of urgency driven not by price but by competitive pressure. “The big banks that we thought would move slowly will arrive in six to 18 months,” he said. “Behind the scenes, deals are coming together quickly.”
Mahoney points to the convergence of fintech as another accelerator: traditional financial interfaces are connected to tokenized rails, and users interact with cryptocurrencies without realizing it.
A new partnership between Anchorage Digital and Mezo offers institutions a path to BTCFi. Through Porto, institutions can now borrow against their BTC using Mezo’s MUSD stablecoin at fixed rates starting at 1%.
Lending through MUSD is available today, while veBTC rewards will soon roll out to the broader Porto and Anchorage platform.
