At the New Frontier of Finance: Public Companies On-Chain

A decade ago, the idea of publicly traded companies purchasing digital assets for their balance sheets would have been nearly unimaginable. Crypto as an asset class was still on the margins of mainstream finance, and decentralized finance (DeFi) in its modern form had yet to emerge. Today, however, the landscape has shifted dramatically. Public companies now hold significant exposure to digital assets, where DATs are collectively estimated to hold more than $100 billion across assets including Bitcoin (BTC -0.93%), Ethereum (ETH -0.09%), Solana (SOL -0.64%) and others.

This rapid evolution has created a new class of firms often referred to as Digital Asset Treasuries (DATs), public companies whose balance sheets include substantial digital-asset holdings. The summer of 2025 marked a high point for this emerging sector, as well-known industry figures and institutions, such as Tom Lee, Joe Lubin, Cantor Fitzgerald and Galaxy Digital, supported or participated in major DAT raises. Billions of dollars flowed into publicly listed vehicles designed to hold assets like Bitcoin (BTC), Ethereum (ETH) and Solana (SOL).

But in October, the industry experienced a sharp reversal. Digital-asset markets declined 30-40% from all-time highs, and DATs, whose market capitalization to net-asset-value (mNAV) ratios had previously enjoyed premiums, saw those premiums collapse into steep discounts. Critics resurfaced, arguing that DATs lacked real utility and could spark forced-selling cascades reminiscent of past crypto crises.

The reality, however, is more nuanced.

The 2022-2025 Bull Run and the Setup for a Correction

The pullback of late 2025 occurred after a multi-year rally in risk-on assets. Bitcoin, often the bellwether for broader digital-asset performance, rose from roughly $15,000 in late 2022 to over $120,000 in mid-2025, an increase well documented by aggregated market-price data from multiple exchanges.

Given the magnitude of those returns, market participants had no shortage of narratives to justify profit-taking:

1. Cycle-based Investors
   • Adherents of the Bitcoin four-year halving cycle saw the late-2025 period as a historically consistent time to reduce exposure.
2. Macro-focused Traders
   • Global macroeconomic developments, such as the Bank of Japan’s first rate hike in nearly two decades and fading expectations of near-term Federal Reserve rate cuts, heightened uncertainty around liquidity and risk assets.
3. Equity Market Dynamics
   • Some equity investors believed that the artificial-intelligence trade, a major driver of the 2023-2025 stock-market rally, was entering exhaustion territory.
4. Structural Events in Crypto Markets
   • On October 10, digital-asset markets experienced the largest single-day liquidation event on record, with over $19 billion in leveraged positions wiped out across major exchanges.
   • Commentators attributed the move to multiple overlapping triggers, including:
     • A post-market policy announcement proposing 100% tariffs on Chinese imports, which rattled global-risk sentiment.
     • The temporary de-pegging of a widely used algorithmic stablecoin, which forced on-chain deleveraging and amplified liquidations.

Regardless of the precise catalyst, the drawdown reflected a common truth of market psychology: sentiment can shift dramatically after long periods of one-directional price movement.

The Aftershocks: Volatility, Liquidations and Market Repricing

In the weeks following the October event, markets remained volatile. Large asset managers, market makers and traders needed time to rebalance after being caught offside by the speed and severity of the correction. Digital-asset treasuries were no exception.

DATs suddenly found themselves with:

• Balance-sheet drawdowns of 30-40%
• Diminished investor appetite for high-beta exposure
• Compressed valuation ratios, including mNAV flipping from premium to discount
• Heightened scrutiny of business models

The question rose to the forefront:

How do these companies generate sustainable revenue beyond asset appreciation?

DATs responded in various ways. Some sold a portion of their holdings to raise cash, manage operating expenses or buy back shares. Others maintained or increased their positions, viewing the correction as a long-term buying opportunity. Meanwhile, the equity prices of many DATs fell sharply, increasing questions about long-term durability. Yet one key factor differentiated this cycle from prior crises: most DATs today use minimal leverage. That significantly reduces the probability of forced selling on the scale witnessed during the 2022 bear market, when highly leveraged counterparties collapsed and triggered industry-wide contagion.

If consolidation occurs in the DAT sector, as is likely in any emerging financial category, it will more likely be gradual, driven by differences in treasury strength, operational discipline and strategic vision.

Public Companies On-Chain: Why the Trend Is Still Early

Despite the turbulence of late 2025, the long-term trend of public companies interacting directly with on-chain financial infrastructure remains at an early stage. Across major blockchains, the percentage of trading, lending, yield-generation and settlement occurring on-chain continues to rise. The growth of on-chain derivatives, synthetic assets and tokenized financial instruments is real. Additionally, tokenization initiatives, including those by major banks, payment providers and asset-management firms, signal growing institutional acceptance of digital rails for settlement and ownership transfer.

Several public companies in the digital-asset space are experimenting with:

• staking and validator operations
• liquid-staking infrastructure
• on-chain market-making or liquidity provisioning
• tokenized-asset issuance
• synthetic derivatives and perpetual markets
• fee-based DeFi revenue streams

While each approach carries risks, these models represent a shift from passive balance-sheet exposure toward active participation in on-chain financial markets.

A More Resilient Future for DATs

As liquidity conditions evolve, many analysts expect risk appetite to gradually return in 2026, particularly if central banks reduce tightening pressures. Increased liquidity historically acts as a tailwind for both digital assets and companies building on decentralized financial infrastructure.

Still, the long-term viability of DATs will depend on several factors:

• Balance-sheet discipline
• Operational transparency
• Diversified revenue streams beyond asset appreciation
• Regulatory clarity
• Ability to navigate on-chain opportunities responsibly

In the short run, equity markets can be unpredictable, driven by sentiment, momentum and macro shocks. But over longer horizons, fundamentals tend to win out.

The Road Ahead for Public Companies On-Chain

The emergence of public companies operating partially or fully on-chain represents a major shift in how corporate treasuries, financial markets and blockchain infrastructure intersect. While the events of 2025 exposed the vulnerabilities of high-beta digital-asset exposure, they also underscored the adaptability and potential resilience of the DAT model.

As markets stabilize and the next cycle unfolds, the companies best positioned to benefit will be those that combine strong balance sheets, transparent strategies and thoughtful engagement with on-chain ecosystems. The transition to a world where more assets are tokenized, tradable and deployable on-chain is already underway, and public companies are only beginning to explore what this frontier makes possible.

The era of public companies on-chain is still in its early stages.