Digital asset treasuries (DATs) were one of the most visible corporate developments of the last bull cycle. built on The premise is that holding Bitcoin on the balance sheet This was itself a value-creation strategy, with many attracting strong market premiums by accumulating BTC faster than competitors.
But as valuations are normalizing and net asset values (NAVs) are tightening, DATs are finding that passive exposure may no longer suffice.
“There’s been a collective realization as NAV started to go down,” Matt Luongo, co-founder and CEO of bitcoin finance platform Mezzo, told CoinDesk in an interview. “Most of them don’t really have an edge over anyone else in buying Bitcoin – you can do that yourself. Now they need to earn yield and deploy strategies that retail may not know about yet.”
Some DATs that rose quickly in the public markets are now facing a different environment: one in which investors are increasingly expecting operational performance or revenue generation, not just BTC appreciation. Even corporate giants with Bitcoin strategies have faced similar pressure. Across the board, the argument has become stronger that simply holding Bitcoin is no longer the perfect business model.
Mezzo co-founder Brian Mahoney says DAT also faces a narrative hurdle. “These companies want the yield that exists in an ecosystem like Ethereum or Solana, but they can’t get there,” he said. “This is a violation of the story they have told to shareholders. You cannot claim to have a Bitcoin-native treasury while earning your yield from Ether “Betting.”
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 change in the types of questions customers are asking.
“If you just want price performance, there are several ways to get it,” Nathan McCauley, CEO of Anchorage Digital, said in an email comment. “But institutions increasingly want their Bitcoin to be productive – to earn rewards, to unlock liquidity, or to serve as collateral. They want 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 enabling institutions to operate without having to sell Bitcoin, without having to go into an unregulated environment, and without having to compromise custody,” McCauley said.
BTCFI’s growth — from about $200 million in total value locked last October to a peak of nearly $9 billion in early October — reflects growing interest, but McCauley says it’s still “a drop in the bucket compared to the total Bitcoin supply.”
Early patterns of adoption
McCauley sees three categories of institutions emerging as early adopters: hedge funds and multi-strategy firms seeking directional yield; asset managers and DATs holding significant BTC reserves; and crypto-native funds that want BTCFi access without building their own infrastructure.
In these groups, he sees consistent demands: “predictable economics, clear collateral mechanics and fully explainable risks.” The first offering through Portero – borrowing against BTC at a fixed rate on Mezzo – fits the profile of what will follow, he said.
upcoming inflection point
If several structural pieces fall into place, there could be a meaningful uptick in BTCFI participation over the next 12-24 months.
“The inflection point comes when complexity disappears,” McCauley said. “When institutions can activate their Bitcoin through familiar custody, compliance and settlement workflows rather than building parallel systems.”
He identifies three drivers of scale: regulatory clarity, custody integration and risk frameworks that reflect institutional thinking. “When those pieces align,” he said, “you could easily see tens of billions of institutional BTC shifted from passive holdings to productive deployment.”
Luongo believes this change is already happening behind closed doors. Conversations with CEOs in the sector reflect a sense of urgency driven not by price but by competitive pressure, he said. “We thought the big banks would move slowly, coming in six to 18 months,” he said. “Behind the scenes, deals are happening fast.”
Mahoney points to fintech convergence as another accelerator: traditional finance front-ends being plugged into token rails, with users interacting with crypto without realizing it.
A new partnership between Anchorage Digital and Mezzo offers institutions a path into BTCFi. Through Porto, institutions can now borrow against their BTC using Mezzo’s MUSD stablecoin at fixed rates starting at 1%.
Borrowing via mUSD is live today, while VEBTC rewards will launch soon on the wider platform in Porto and Anchorage.