Summary
1. The Shadow Over the DAT Strategy Boom—Stock Prices Plummet Due to Market Dependence
In the first half of 2025, DAT companies surged as BTC prices were expected to rise, but their vulnerabilities were exposed during the recent cryptocurrency downturn. A prime example, Metaplanet, saw its stock price drop by 79% from its peak, and its mNAV fell to 0.91 times, resulting in a valuation below the held BTC.
2. A 'Tightrope' Strategy Highly Sensitive to Market and Regulatory Changes
The DAT strategy, overly reliant on cryptocurrency prices, has led to a rapid decline in corporate value during market downturns. Moreover, with the prospect of increased regulation, such as JPX's consideration of mandatory audits and the transition of cryptocurrency regulation to the Financial Instruments and Exchange Act, companies are being forced to rethink their strategies.
3. BTC-backed Loans and Share Buybacks Could Be 'Too Little, Too Late'
Metaplanet has secured a BTC-backed financing facility of up to $500 million and plans to proceed with share buybacks, but these measures may have limited impact during BTC price declines. Further price drops could increase the risk of additional collateral (margin calls) and worsen liquidity.
Currently, companies are forced to reconsider their strategies in light of market and regulatory trends
Bitcoin Market Review for October and Future Market Outlook
In recent years, globally, companies have increasingly incorporated cryptocurrencies like Bitcoin into their balance sheets as part of the 'Digital Asset Treasury (DAT)' strategy. This trend accelerated in 2025, garnering strong interest as a method to enhance corporate value. However, the recent softening of cryptocurrency prices has once again highlighted the associated risks.
In the first half of 2025, the announcement of DAT strategies by listed companies led to significant stock price increases. This phenomenon was driven by individual investors flocking to replicate the success stories seen in companies like Strategy in the USA and Metaplanet in Japan.
Additionally, expectations for Bitcoin price increases were high in 2025 due to factors such as the previous year's halving and the inauguration of President Trump. For companies with stagnant existing businesses and weak financial foundations, the DAT strategy was positioned as a last-ditch effort for revival.
While leveraging the future potential and characteristics of cryptocurrencies to increase corporate value is the essence of the DAT strategy, it also represents a strategy that balances delicately on the fine line between risk and return. Particularly in price downturns, the deployment of strategies becomes crucial. At the time of writing, the situation for cryptocurrencies, including Bitcoin, continues to be bleak, forcing many DAT companies to restructure their strategies according to circumstances.
The recent price trends highlight the harsh realities faced by DAT companies. For example, Metaplanet's stock price has fallen by about 79% from its mid-June peak compared to the time of writing. The company's overall market value and the value of the Bitcoin it holds, indexed as 'mNAV', fell below 1.0 times for the first time in October and has since dropped to 0.91 times.
This means that, considering Metaplanet's strategy and future prospects, investors are valuing the company's stock lower than the Bitcoin it holds. Other domestic listed DAT companies also show soft stock price trends, and there have been instances abroad where companies had to sell held cryptocurrencies to maintain their listings.
Cryptocurrencies, known for their high volatility, can sometimes hold significant unrealized gains, but they also carry the risk of substantial losses.
Regardless of their own strategies, these characteristics make cryptocurrencies highly susceptible to market conditions compared to other financial instruments. Additionally, since November, there have been reports that the Japan Exchange Group (JPX), which includes the Tokyo Stock Exchange, is considering stricter rules, including mandatory audits for DAT companies. This is also a factor that weakens investor sentiment.
In Japan, discussions are underway to transition the regulatory framework for cryptocurrencies to the Financial Instruments and Exchange Act, and after 2026, a major shift could again occur in the cryptocurrency industry, not just for DAT companies. Therefore, as the uncertainty over the future of the DAT strategy increases, companies may be increasingly forced to change their policies.
The Fate of Borrowing Strategies Backed by BTC
At the end of October, Metaplanet announced that it had secured a financing facility of up to $500 million backed by its held Bitcoin, along with plans to proceed with share buybacks. Going forward, in addition to purchasing Bitcoin, the company will continue with share buybacks, but depending on the cryptocurrency market trends, stock prices could fall again. Therefore, share buybacks might prove to be 'too little, too late', and may not lead to fundamental improvements.
