ArkStream Capital: Q3 upward trend comes to an end, Q4 enters repricing range

Original Title: "ArkStream Capital: Q3 Upswing Comes to a Pause, Q4 Enters Repricing Zone"

Original Author: ArkStream Capital

The third quarter of 2025 is crucial for the cryptocurrency market as it serves as a transitional period: it follows the rebound of risk assets since July and further confirms the macro turning point after the interest rate cut in September. However, entering the fourth quarter, the market simultaneously suffers from shocks of macro uncertainty and the outbreak of structural risks within the cryptocurrency market, leading to a sharp reversal in market rhythm and the breaking of previous optimistic expectations.

As the pace of inflation recedes, coupled with the longest government shutdown in U.S. history in October and escalating fiscal disputes, the latest FOMC meeting minutes clearly signal a "caution against premature rate cuts," causing the market's judgment on policy paths to swing violently. The previously clear narrative of "the rate cut cycle has begun" was quickly weakened, and investors began to reprice potential risks such as "higher rates lasting longer" and "soaring fiscal uncertainty," the repeated iterations of rate cut expectations significantly raised the volatility of risk assets. In this context, the Federal Reserve also deliberately suppressed excessive market expectations to avoid premature easing of financial conditions.

As policy uncertainty rises, the prolonged government shutdown further exacerbates macro pressures, creating a dual squeeze on economic activity and financial liquidity:

• GDP growth significantly dragged down: The Congressional Budget Office estimates that the government shutdown will lower the annualized growth rate of real GDP in Q4 2025 by 1.0% - 2.0%, equivalent to billions of dollars in economic losses.

• Key data missing and liquidity contraction: The shutdown has led to the inability to release key data such as non-farm payrolls, CPI, and PPI on time, leaving the market in a "data blind spot," increasing the difficulty of policy and economic judgments; at the same time, the interruption of federal spending has passively tightened short-term liquidity, putting pressure on risk assets.

Entering November, discussions within the U.S. stock market about whether the AI sector has reached a phase of overvaluation have intensified, with the volatility of high-valuation tech stocks rising, affecting overall risk appetite and making it difficult for crypto assets to gain spillover support from the U.S. stock market's beta. Although the financial market's early pricing of rate cuts in the third quarter significantly boosted risk appetite, this "liquidity optimism" was clearly weakened in the fourth quarter due to the government shutdown and repeated policy uncertainties, leading risk assets into a new round of repricing.

Alongside rising macro uncertainties, the cryptocurrency market also faces its own structural shocks. Between July and August, Bitcoin and Ethereum both broke historical highs (Bitcoin surged above $120,000; Ethereum reached about $4,956 at the end of August), and market sentiment became temporarily positive.

However, the mass liquidation event at Binance on October 11 became the most severe systemic shock to the crypto industry:

• As of November 20, both Bitcoin and Ethereum saw significant pullbacks from their highs, weakening market depth and expanding the divergence between bulls and bears.

• The liquidity gap caused by the liquidation weakened overall market confidence, and market depth at the beginning of Q4 significantly decreased, while the spillover effect of the liquidation exacerbated price volatility and increased counterparty risk.

At the same time, the inflow of funds into spot ETFs and crypto stocks' DAT has significantly slowed in the fourth quarter, with insufficient institutional buying pressure to offset the selling pressure from the liquidation, causing the cryptocurrency market to gradually enter a phase of high turnover and volatility since late August, ultimately evolving into a more pronounced adjustment trend.

Looking back at the third quarter, the rise in the cryptocurrency market was partly due to the overall rebound in risk appetite and partly influenced by the positive impact of listed companies promoting DAT (Digital Asset Treasury) strategies. Such strategies improved institutional acceptance of cryptocurrency asset allocation and enhanced the liquidity structure of certain assets, becoming one of the core narratives of the season. However, as the liquidity environment tightened and price corrections intensified in the fourth quarter, the sustainability of DAT-related buying pressure began to weaken.

The essence of the DAT strategy lies in companies incorporating part of their token assets into their balance sheets, enhancing capital efficiency through on-chain liquidity, yield aggregation, and staking tools. As more listed companies and funds attempt to collaborate with stablecoin issuers, liquidity protocols, or tokenization platforms, this model is gradually moving from the conceptual exploration phase to the practical implementation phase. In this process, assets such as ETH, SOL, BNB, ENA, and HYPE have shown trends of "token---equity---asset" boundary integration across different dimensions, reflecting a certain bridging role of digital asset treasuries in the macro liquidity cycle.

However, in the current market environment, the innovative asset valuation frameworks related to DAT (such as mNAV) have generally fallen below 1, indicating a market discount on the net value of on-chain assets. This phenomenon reflects investors' concerns about the liquidity, yield stability, and sustainable valuation of related assets, and also implies that the asset tokenization process faces certain adjustment pressures in the short term.

At the sector level, multiple segments exhibit sustained growth momentum:

• The stablecoin sector continues to expand in market capitalization, with a total market value exceeding $297 billion, further strengthening its role as a funding anchor in a macro uncertainty environment.

• The Perp sector, represented by HYPE and ASTER, has achieved significant activity improvements through trading structure innovations (such as on-chain matching, funding rate optimization, and tiered liquidity mechanisms), becoming the main beneficiary of capital rotation during the quarter.

• The prediction market sector has become active again under macro expectation fluctuations, with Polymarket and Kalshi achieving record-high transaction volumes, becoming real-time indicators of market sentiment and risk appetite.

The rise of these sectors indicates that capital is shifting from single-price speculation to structured allocations around three core logics: "liquidity efficiency---yield generation---information pricing."

Overall, the rhythm of the cryptocurrency and U.S. stock markets in the third quarter of 2025 was misaligned, transitioning in the fourth quarter to a concentrated exposure of structural risks and a comprehensive rise in liquidity pressure. The government shutdown delayed the release of key macro data and exacerbated fiscal uncertainty, weakening overall market confidence; debates in the U.S. stock market around AI valuations increased volatility, while the cryptocurrency market faced more direct liquidity and depth shocks following the Binance liquidation event. Meanwhile, the inflow of funds into DAT strategies slowed, and mNAV generally fell below 1, indicating that the market remains highly sensitive to the liquidity environment during the institutionalization process, with evident vulnerabilities. Whether the market can stabilize going forward will largely depend on the speed of digestion of the liquidation event's impact and whether the market can gradually restore liquidity and emotional stability in an environment of increasing divergence between bulls and bears.

Rate Cut Expectations Realized, Market Enters Repricing Phase

In the third quarter of 2025, the key variable in the global macro environment was not the event of "rate cuts" itself, but the generation, trading, and consumption of rate cut expectations. The market's pricing of the liquidity turning point began in July, with actual policy actions becoming nodes to validate existing consensus.

After two quarters of contention, the Federal Reserve lowered the target range for the federal funds rate by 25 basis points to 4.00%--4.25% at the September FOMC meeting, and then further cut rates slightly in October. However, due to the previous market's bets on rate cuts being highly consistent, the policy actions themselves had limited marginal impact on risk assets, and the signaling effect of the rate cuts had already been largely priced in. At the same time, as the pace of inflation's decline slowed and economic resilience exceeded expectations, the Federal Reserve began to express clear concerns about "the market's premature pricing of consecutive rate cuts next year," leading to a significant decrease in the probability of further rate cuts in December after October. This communication stance became a new variable weighing on market risk appetite.

Macro data in the third quarter exhibited characteristics of "moderate cooling":

• Core CPI year-on-year fell from 3.3% in May to 2.8% in August, confirming the downward trend in inflation;

• Non-farm payrolls added fewer than 200,000 jobs for three consecutive months;

• The job vacancy rate fell to 4.5%, the lowest level since 2021.

This set of data indicates that the U.S. economy has not fallen into recession but has entered a phase of moderate slowdown, providing the Federal Reserve with policy space for "controllable rate cuts." Consequently, the market had formed a consensus of "certain rate cuts" by early July.

According to the CME FedWatch tool, the probability of a 25 basis point rate cut in September exceeded 95% by the end of August, indicating that the market had almost completed the expectation realization in advance. The bond market also reflected this signal:

• The yield on 10-year U.S. Treasuries fell from 4.4% at the beginning of the quarter to 4.1% at the end of the quarter;

• The decline in the 2-year yield was even greater, about 50 basis points, indicating that market bets on policy shifts were more concentrated.

The macro turning point in the third quarter was more reflected in "the digestion of expectations" rather than "policy changes." The pricing of liquidity recovery was largely completed between July and August, and the actual rate cut in September was merely a formal confirmation of existing consensus. For risk assets, the new marginal variable shifted from "whether to cut rates" to "the pace and sustainability of rate cuts."

However, when the rate cuts actually materialized, the marginal effects of expectations had been completely consumed, and the market quickly entered a "vacuum phase with no new catalysts."

Since mid-September, the changes in macro indicators and asset prices have shown significant dulling:

• The U.S. Treasury yield curve has flattened: As of the end of September, the spread between 10-year and 3-month Treasury yields was only about 14 basis points, indicating that while term premiums still exist, the risk of inversion has been alleviated.

• The dollar index fell back to the 98--99 range, significantly weakening from the year's high (107), but the dollar financing cost still appeared tight at the end of the quarter.

• The marginal contraction of liquidity in the U.S. stock market: The Nasdaq index continued to rise, but ETF inflows slowed, and trading volume growth was weak, indicating that institutions had begun to adjust their risk exposures at high levels.

This "vacuum period after the realization of expectations" became the most representative macro phenomenon of the quarter. The market traded on "certainty of rate cuts" in the first half, while in the latter half, it began to price in "the reality of slowing growth."

The dot plot (SEP) released at the September FOMC meeting showed significant internal divergence among decision-makers regarding future interest rate paths:

• The median expected policy rate at the end of 2025 was lowered to 3.9%;

• The predicted range by committee members fell between 3.4%--4.4%, reflecting divergent opinions on inflation stickiness, economic resilience, and policy space.

After the rate cut in September and another slight cut in October, the Federal Reserve's communication gradually shifted to a more cautious tone to avoid premature easing of financial conditions. As a result, the probability of a rate cut in December, which had been highly bet upon, has now significantly receded, and the policy path has returned to a "data-dependent" framework rather than a "preset rhythm."

Unlike previous rounds of "crisis-style easing," this round of rate cuts belongs to a controllable policy adjustment. While cutting rates, the Federal Reserve continues to advance balance sheet reduction, sending signals of "stabilizing capital costs and suppressing inflation expectations," emphasizing the balance between growth and prices rather than actively expanding liquidity. In other words, the interest rate turning point has been established, but the liquidity turning point has yet to arrive.

In this context, the market has shown clear signs of differentiation. The decline in financing costs provides valuation support for some high-quality assets, but broad liquidity has not significantly expanded, and capital allocation has become cautious.

• Sectors with robust cash flow and profit support (AI, tech blue chips, some DAT-related U.S. stocks) have continued the trend of valuation recovery;

• Assets with high leverage, high valuations, or lacking cash flow support (including some growth stocks and non-mainstream crypto tokens) have seen weakened momentum after the realization of expectations, with trading activity significantly declining.

Overall, the third quarter of 2025 was a "realization period of expectations," rather than a "liquidity release period." The market priced in the certainty of rate cuts in the first half, then shifted to reassessing slowing growth in the latter half. The premature consumption of expectations has left risk assets at high levels but lacking sustained upward momentum. This macro landscape laid the foundation for subsequent structural differentiation and explains the "breakthrough---pullback---high-level volatility" trend observed in the cryptocurrency market in Q3: funds flowed towards relatively stable, cash flow-verifiable assets rather than systemic risk assets.

The Explosion of Non-Bitcoin Assets and Structural Transition of DAT

In the third quarter of 2025, Digital Asset Treasury (DAT) transitioned from a marginal concept in the crypto industry to the fastest-spreading new theme in global capital markets. This quarter marked the first time that public market funds entered crypto assets simultaneously in terms of scale and mechanism: through traditional financing tools such as PIPE, ATM, and convertible bonds, billions of dollars in fiat liquidity directly entered the crypto market, forming a structured trend of "coin-stock linkage."

The starting point of the DAT model can be traced back to the pioneer in the traditional market, MicroStrategy (NASDAQ: MSTR). Since 2020, the company has been the first to incorporate Bitcoin into its corporate balance sheet and has accumulated approximately 640,000 Bitcoins through multiple rounds of convertible bonds and ATM issuances between 2020 and 2025, with total investments exceeding $47 billion. This strategic move not only reshaped the company's asset structure but also created a paradigm where traditional stocks became the "secondary carrier" of crypto assets.

Due to systemic differences in valuation logic between the equity market and on-chain assets, MicroStrategy's stock price has long been above its Bitcoin net value, with mNAV (market cap / on-chain asset net value) consistently maintaining in the range of 1.2--1.4 times. This "structural premium" reveals the core mechanism of DAT:

Companies hold crypto assets through public market financing, creating a two-way communication and valuation feedback between fiat capital and crypto assets at the corporate level.

Mechanistically, MicroStrategy's experiment laid the three pillars of the DAT model:

• Financing channel: Introducing fiat liquidity through PIPE, ATM, or convertible bonds, providing funds for corporate on-chain asset allocation;

• Asset reserve logic: Incorporating crypto assets into the financial reporting system, forming a corporate-level "On-Chain Treasury";

• Investor entry: Allowing traditional capital market investors to gain indirect exposure to crypto assets through stocks, reducing compliance and custody barriers.

These three elements together form the "structural cycle" of DAT: financing---holding---valuation feedback. Companies utilize traditional financial tools to absorb liquidity, forming reserves of crypto assets, and then create capital enhancement through the premium in the equity market, achieving dynamic rebalancing between capital and tokens.

The significance of this structure lies in that it has achieved the compliant entry of digital assets into the traditional financial system's balance sheets for the first time, granting the capital market a new asset form------"tradable on-chain asset mapping." In other words, companies are no longer just on-chain participants but have become structural intermediaries between fiat capital and crypto assets.

As this model has been validated by the market and rapidly replicated, the third quarter of 2025 marks the second phase of the diffusion of the DAT concept: extending from a "store of value treasury" centered on Bitcoin to productive assets such as Ethereum (ETH) and Solana (SOL) (PoS yields or DeFi yields). This new generation of DAT models, centered around the mNAV (market cap / on-chain asset net value) pricing system, incorporates yield-generating assets into corporate cash flow and valuation logic, forming a "yield-driven treasury cycle." Unlike the early Bitcoin treasury, assets like ETH and SOL possess sustainable staking yields and on-chain economic activities, making their treasury assets not only store value but also exhibit cash flow characteristics. This change marks the transition of DAT from mere asset holding to a stage of capital structure innovation centered on productive yields, becoming a key bridge connecting the value of productive crypto assets with the valuation system of traditional capital markets.

Note: Entering November 2025, a new round of declines in the cryptocurrency market triggered the most systematic valuation repricing of the DAT sector since its inception. With core assets like ETH, SOL, and BTC experiencing rapid pullbacks of 25--35% in October and November, along with the short-term dilution effects caused by some DAT companies accelerating balance sheet expansion through ATM, the mNAV of mainstream DAT companies generally fell below 1. Companies like BMNR, SBET, and FORD experienced varying degrees of "discounted trading" (mNAV ≈ 0.82--0.98), and even MicroStrategy (MSTR), which had long maintained a structural premium, saw its mNAV briefly fall below 1 in November for the first time since the launch of its Bitcoin treasury strategy in 2020. This phenomenon marks the market's transition from the previous structural premium phase to a "asset-dominated, valuation discount" defensive stage. Institutional investors generally view this as the first comprehensive "stress test" for the DAT industry, reflecting that the capital market is reassessing the sustainability of on-chain asset yields, the rationality of treasury expansion pace, and the long-term impact of financing structures on equity value.

SBET and BMNR Lead the Ethereum Treasury Wave

In the third quarter of 2025, the market landscape for Ethereum Treasury (ETH DAT) was initially established. Among them, SharpLink Gaming (NASDAQ: SBET) and BitMine Immersion Technologies (NASDAQ: BMNR) became the two leading companies defining the industry paradigm. They not only replicated MicroStrategy's balance sheet strategy but also achieved a leap from "concept to institution" in financing structure, institutional participation, and information disclosure standards, constructing a dual pillar for the ETH treasury cycle.

BMNR: Capital Engineering of Ethereum Treasury

As of the end of September 2025, BitMine Immersion Technologies (BMNR) has established its position as the world's largest Ethereum treasury. According to the company's latest disclosure, it holds approximately 3,030,000 ETH, corresponding to an on-chain net asset of about $12.58 billion (based on the closing price of $4,150/ETH on October 1). If cash and other liquid assets on the company's books are included, BMNR's total crypto and cash holdings are approximately $12.9 billion.

Based on this estimate, BMNR's holdings account for about 2.4--2.6% of the circulating supply of Ethereum, making it the first publicly listed institution in the market to hold over 3 million ETH. The corresponding stock market value is approximately $11.2--11.8 billion and the estimated mNAV is approximately 1.27×, making it the highest valued among all listed companies in the digital asset treasury (DAT) category.

BMNR's strategic leap is closely related to its organizational restructuring. After taking full control of capital operations in mid-2025, the company's chairman Tom Lee (former co-founder of Fundstrat) proposed the core assertion: "ETH is the sovereign asset of the future." Under his leadership, the company completed a structural transformation from a traditional mining enterprise to one that uses ETH as the sole reserve asset and PoS yields as the core cash flow, becoming the first publicly listed company in the U.S. to use Ethereum staking yields as its main operating cash flow.

In terms of financing, BMNR has demonstrated rare intensity and execution efficiency. The company has expanded its funding sources simultaneously through public markets and private placements, providing long-term ammunition for its Ethereum treasury strategy. This quarter, BMNR not only refreshed the financing rhythm of traditional capital markets but also laid the institutionalized prototype of "on-chain asset securitization."

On July 9, BMNR registered a Form S-3 statement and signed an "At-the-Market (ATM)" issuance agreement with Cantor Fitzgerald and ThinkEquity, with an initial authorized amount of $2 billion. Just two weeks later, on July 24, the company disclosed in an SEC 8-K filing that it raised the limit to $4.5 billion in response to the market's positive response to its ETH treasury model. On August 12, the company submitted a supplementary statement to the SEC, raising the total ATM limit to $24.5 billion (an additional $20 billion) and clearly stating that the funds would be used to purchase ETH and expand the PoS staking asset portfolio.

These limits represent the maximum amount BMNR can issue stocks at sustainable market prices approved by the SEC, and do not equate to actual cash raised.

In terms of actual funding, the company has completed several concrete transactions:

• In early July 2025, it completed a $250 million PIPE private placement to provide funds for initial ETH accumulation;

• ARK Invest (Cathie Wood) disclosed on July 22 that it purchased approximately $182 million of BMNR common stock, of which $177 million in net fundraising was directly used by the company to increase its ETH holdings;

• Founders Fund (Peter Thiel) filed with the SEC on July 16 to report a 9.1% stake, which, while not new financing, reinforced institutional consensus in the market.

Additionally, BMNR has cumulatively sold approximately $4.5 billion worth of stock under its early ATM authorization, with the actual fundraising scale significantly exceeding the initial PIPE amount. As of September 2025, the company has cumulatively utilized funds amounting to billions of dollars through multiple channels such as PIPE and ATM, and continues to advance its long-term expansion plan under the total authorized framework of $24.5 billion.

BMNR's financing system presents a clear three-tier structure:

• Deterministic funding realization layer------completed PIPE and institutional directed subscriptions, totaling approximately $450--500 million;

• Market expansion layer------phased stock sales through the ATM mechanism, with actual fundraising reaching the level of billions of dollars;

• Potential ammunition layer------the SEC-approved total ATM limit of $24.5 billion, providing upper limit flexibility for subsequent ETH treasury expansion.

With this layered capital structure, BMNR has quickly established a reserve scale of approximately 3.03 million ETH (valued at about $12.58 billion), transforming its treasury strategy from "single-position experiment" to "institutionalized asset allocation."

BMNR's valuation premium primarily stems from two layers of logic:

• Asset layer premium: PoS staking yields remain at an annualized rate of 3.4--3.8%, forming a stable cash flow anchor;

• Capital layer premium: As a "compliant ETH leverage channel," its stock price typically leads ETH spot prices by 3--5 trading days, becoming a forward indicator for institutions tracking the ETH market.

In market behavior, BMNR's stock price reached historical highs in sync with ETH during the third quarter and repeatedly drove sector rotation. Its high turnover rate and the speed of circulating shares indicate that the DAT model is gradually evolving into a "trading mechanism for on-chain asset mapping" in the capital market.

SBET: A Transparent Sample of Institutionalized Treasury

In contrast to BitMine Immersion Technologies (BMNR)'s aggressive balance sheet expansion strategy, SharpLink Gaming (NASDAQ: SBET) chose a more prudent and institutionalized path for treasury in the third quarter of 2025. Its core competitiveness lies not in the scale of funds but in the transparency of governance structure, disclosure standards, and auditing systems, establishing a replicable "institutional-level template" for the DAT industry.

As of September 2025, SBET holds approximately 840,000 ETH, with an estimated on-chain asset value of about $3.27 billion based on the average price at the end of the quarter, corresponding to a stock market value of about $2.8 billion, with mNAV ≈ 0.95×. Although the valuation is slightly lower than the net asset value, the company's quarterly EPS growth reached as high as 98%, demonstrating its strong operational leverage and execution efficiency in monetizing ETH and controlling costs.

SBET's core value lies not in aggressive position expansion but in establishing the first compliant and auditable governance framework in the DAT industry:

• Strategic advisor Joseph Lubin (co-founder of Ethereum, founder of ConsenSys) joined the company's strategic committee in Q2, promoting the inclusion of staking yields, DeFi derivatives, and liquidity mining strategies into the corporate treasury portfolio;

• Pantera Capital and Galaxy Digital participated in PIPE financing and secondary market holdings, providing the company with institutional liquidity and on-chain asset allocation advisory;

• Ledger Prime offers on-chain risk hedging and volatility management models;

• Grant Thornton serves as an independent auditing agency, responsible for verifying the authenticity of on-chain assets, yields, and staking accounts.

This governance system constitutes the first "on-chain verifiable + traditional audit parallel" disclosure mechanism in the DAT industry.

In SBET's 10-Q report for the third quarter of 2025, the company fully disclosed for the first time:

• The company's main wallet addresses and on-chain asset structure;

• Staking yield curves and node distributions;

• Risk limits for collateral and restaking positions.

This report made SBET the first publicly listed company to simultaneously disclose on-chain data in SEC filings, significantly enhancing institutional investors' trust and financial comparability. The market generally views SBET as a "compliant ETH index component": its mNAV is close to 1×, with prices highly correlated with the ETH market, yet possessing relatively low volatility characteristics due to information transparency and robust risk structure.

Dual Main Lines of ETH Treasury: Asset-Driven and Governance-Driven

The differentiation paths of BMNR and SBET form the two core main lines of ETH DAT ecosystem development in the third quarter of 2025:

• BMNR: Asset-driven------focusing on financing expansion, institutional holdings, and capital premiums. BMNR rapidly accumulates ETH positions using PIPE and ATM financing tools and forms a market-driven leverage channel through mNAV pricing, promoting the direct coupling of fiat capital and on-chain assets.

• SBET: Governance-driven------centering on transparency compliance, structured treasury yield, and risk control. SBET incorporates on-chain assets into auditing and information disclosure systems, establishing institutional boundaries for DAT through a governance structure that parallels on-chain verification and traditional accounting.

The two represent the two poles of ETH treasury's transition from "reserve logic" to "institutionalized asset form": the former expands capital scale and market depth, while the latter establishes governance trust and institutional compliance foundation. In this process, the functional attributes of ETH DAT have transcended "on-chain reserve assets," evolving into a composite structure that integrates cash flow generation, liquidity pricing, and balance sheet management.

Institutional Logic of PoS Yields, Governance Rights, and Valuation Premiums

The core competitiveness of PoS crypto asset treasuries like ETH comes from the triple combination of yield-generating asset structure, network-level discourse power, and market valuation mechanisms.

High Staking Yields: Establishing Cash Flow Anchors

Unlike Bitcoin's "non-productive holdings," ETH, as a PoS network asset, can earn an annualized yield of 3--4% through staking and form a compound yield structure (Staking + LST + Restaking) in the DeFi market. This allows DAT companies to capture real cash flows on-chain in corporate form, transforming digital assets from "static reserves" to "yield-generating assets" with stable endogenous cash flow characteristics.

Discourse Power and Resource Scarcity under PoS Mechanism

As the staking scale of ETH treasury companies expands, they gain governance rights and ranking power at the network level. BMNR and SBET currently control approximately 3.5--4% of the total ETH staking, entering the marginal influence range of protocol governance. This level of control possesses a premium logic similar to "systemic status," with the market willing to assign a valuation multiple above the net asset value.

Mechanism of mNAV Premium Formation

The valuation of DAT companies reflects not only the net value (NAV) of their held on-chain assets but also incorporates two types of expectations:

• Cash flow premium: Expectations of distributable profits from staking yields and on-chain strategies;

• Structural premium: The corporate equity provides traditional institutions with a compliant ETH exposure channel, thus forming institutional scarcity.

At the market peak in July and August, the average mNAV of ETH DAT maintained in the range of 1.2--1.3 times, with some companies (BMNR) even reaching 1.5 times. This valuation logic is similar to the premium of gold ETFs or the NAV discount/premium structure of closed-end funds, serving as an important "pricing intermediary" for institutional funds entering on-chain assets.

In other words, the premium of DAT is not driven by sentiment but is formed based on a composite structure of real yields, network power, and capital channels. This also explains why ETH treasuries achieved higher capital density and trading activity than Bitcoin treasuries (MSTR model) in just one quarter.

Structural Evolution from ETH to Multi-Altcoin Asset Treasuries

Entering August and September, the expansion speed of non-Ethereum DAT significantly accelerated. The new wave of institutional allocation represented by Solana treasuries marks a shift in market themes from "single asset reserves" to "multi-chain asset layering." This trend indicates that the DAT model is replicating from the ETH core to multiple ecosystems, forming a more systematic cross-chain capital structure.

FORD: Institutional Sample of Solana Treasury

Forward Industries (NASDAQ: FORD) has become the most representative case in this phase. The company completed $1.65 billion in PIPE financing in the third quarter, with all funds used for Solana spot accumulation and ecological collaborative investments. As of September 2025, FORD holds approximately 6.82 million SOL, with an estimated on-chain treasury net value of about $1.69 billion based on the average price of $248--$252 at the end of the quarter, corresponding to a stock market value of about $2.09 billion, with mNAV ≈ 1.24×, ranking first among non-ETH treasury companies.

Unlike early ETH DAT, FORD's rise is not driven by a single asset but is the result of the resonance of multiple capitals and ecosystems:

• Investors include Multicoin Capital, Galaxy Digital, and Jump Crypto, all of which are long-term core investment institutions in the Solana ecosystem;

• The governance structure incorporates members of the Solana Foundation advisory committee, establishing a strategic framework of "on-chain assets as corporate production materials";

• The SOL assets held remain fully liquid, with no staking or DeFi configurations yet, preserving strategic flexibility for future restaking and RWA asset linkage.

This "high liquidity + configurable treasury" model positions FORD as the capital hub of the Solana ecosystem, also reflecting the market's structural premium expectations for high-performance public chain assets.

Structural Changes in the Global DAT Landscape

As of the end of the third quarter of 2025, the total disclosed scale of non-Bitcoin DAT treasuries globally has exceeded $24 billion, growing approximately 65% quarter-on-quarter. The structural distribution is as follows:

• Ethereum (ETH) still dominates, accounting for about 52% of the total scale;

• Solana (SOL) accounts for about 25%, becoming the second-largest allocation direction for institutional funds;

• Other funds are mainly distributed among emerging assets such as BNB, SUI, and HYPE, forming the horizontal expansion layer of the DAT model.

The valuation anchor of ETH DAT lies in the PoS yield and governance rights value, representing the combined logic of long-term cash flow and network control; SOL DAT, on the other hand, emphasizes capital efficiency and scalability as its core premium sources. BMNR and SBET established the institutional and asset foundations during the ETH phase, while the emergence of FORD propelled the DAT model into the second phase of multi-chain and ecological development.

At the same time, some new entrants are beginning to explore the functional extension of DAT:

• Ethena (ENA) launched the StablecoinX model, combining treasury bond yields with on-chain hedging structures, attempting to create a "yield-type stablecoin treasury" to generate stable yet cash-flowing reserve assets;

• BNB DAT is led by the exchange system, relying on the asset collateralization of ecological enterprises and the tokenization of reserves to expand liquidity pools, forming a "closed treasury system."

Phase Stagnation and Risk Repricing After Valuation Overextension

After the concentrated upswing in July and August, the DAT sector entered a rebalancing phase following valuation overextension in September. Secondary treasury stocks once pushed the overall sector premium higher, with the median mNAV exceeding 1.2×, but as regulatory tightening and financing slowed, valuation support quickly retreated at the end of the quarter, and the sector's heat noticeably cooled.

Structurally, the DAT industry is transitioning from "asset innovation" to "institutional integration." ETH and SOL treasuries have established a "dual core valuation system," but the liquidity, compliance, and real yield of expansive assets are still in the verification phase. In other words, the market driving force has shifted from "premium expectations" to "yield realization," and the industry has entered a repricing cycle.

After entering September, core indicators weakened in sync:

• ETH staking yields fell from 3.8% at the beginning of the quarter to 3.1%, while SOL staking yields decreased by over 25% quarter-on-quarter;

• Several secondary DAT companies saw their mNAV drop below 1, with diminishing marginal capital efficiency;

• The total amount of PIPE and ATM financing declined by about 40% quarter-on-quarter, with institutions like ARK, VanEck, and Pantera pausing new DAT allocations;

• At the ETF level, net inflows turned negative, with some funds replacing ETH treasury positions with short-duration Treasury bond ETFs to reduce valuation volatility risks.

This pullback exposes a core issue: the capital efficiency of the DAT model has been overextended in the short term. The early valuation premium stemmed from structural innovation and institutional scarcity, but as on-chain yields decline and financing costs rise, the speed of corporate balance sheet expansion has outpaced yield growth, leading to a "negative dilution cycle"------where market capitalization growth relies on financing rather than cash flow.

From a macro perspective, the DAT sector is entering a "valuation internalization period":

• Core companies (BMNR, SBET, FORD) maintain structural stability relying on robust treasuries and information transparency;

• Marginal projects face deleveraging and liquidity contraction due to single capital structures and insufficient disclosures;

• On the regulatory front, the SEC requires companies to publicly disclose main wallet addresses and staking yield disclosure standards, further compressing the space for "high-frequency balance sheet expansion."

Short-term risks mainly arise from valuation compression caused by liquidity reflexivity. When mNAV continues to decline and PoS yields fail to cover financing costs, market confidence in the "on-chain reserves + equity pricing" model will be undermined, leading to a systemic valuation correction similar to that seen after the summer of DeFi in 2021. Nevertheless, the DAT industry has not entered a recession but is transitioning from "balance sheet-driven" to "yield-driven" stages. In the coming quarters, ETH and SOL treasuries are expected to maintain institutional advantages, with their valuation core increasingly relying on:

Staking and restaking yield efficiency;

On-chain transparency and compliance disclosure standards.

In other words, the first phase of the DAT boom has ended, and the industry is entering a "consolidation and verification period." The key variables for future valuation recovery will be the stability of PoS yields, the integration efficiency of restaking, and the clarity of regulatory policies.

Prediction Markets: The "Barometer" of Macro Narratives and the Rise of Attention Economy

In the third quarter of 2025, prediction markets have transitioned from "crypto-native marginal play" to "a new type of market infrastructure at the intersection of on-chain and compliant finance." In an environment of frequent macro policy changes and significant fluctuations in inflation and interest rate expectations, prediction markets have gradually become important venues for capturing market sentiment, hedging policy risks, and discovering narrative prices. The integration of macro and on-chain narratives has evolved them from speculative tools into market layers that aggregate information and signal prices.

Historically, crypto-native prediction markets have shown significant foresight during multiple macro and political events. During the 2024 U.S. presidential election, Polymarket's total trading volume exceeded $500 million, with the contract "Who will win the presidential election" alone reaching $250 million, and a single-day peak transaction volume exceeding $20 million, setting a record for on-chain prediction markets. In macro events such as "Will the Fed cut rates in September 2024?", the price changes of contracts have clearly led the expected adjustments in CME FedWatch interest rate futures, indicating that prediction markets have at times possessed leading indicator value.

Despite this, the overall scale of on-chain prediction markets remains far smaller than traditional counterparts. Since 2025, the cumulative trading volume of global crypto prediction markets (represented by Polymarket, Kalshi, etc.) has reached approximately $24.1 billion, while annual trading volumes for traditional compliant platforms like Betfair and Flutter Entertainment are in the hundreds of billions. The scale of on-chain markets is still less than 5% of traditional markets, but they exhibit higher growth rates in user adoption, thematic coverage, and trading activity compared to traditional financial products.

In the third quarter, Polymarket emerged as a phenomenon of growth. Contrary to the rumors of a "billion-dollar valuation financing" earlier in the year, the latest news in early October indicated that the parent company of the New York Stock Exchange, ICE, plans to invest up to $2 billion for approximately 20% equity, corresponding to a valuation of about $8--9 billion for Polymarket. This means its data and business model have gained recognition at the Wall Street level. By the end of October, Polymarket's annual cumulative trading volume was approximately $13.2 billion, with September's monthly trading volume reaching $1.4--1.5 billion, significantly up from the second quarter, and October's monthly trading volume even hitting a historical high of $3 billion. Trading themes focused on macro and regulatory events such as "Will the Fed cut rates at the September FOMC meeting?", "Will the SEC approve Ethereum ETFs by the end of the year?", "Probability of key states in the U.S. presidential election," and "Performance of Circle (CIR) stock post-IPO." Some researchers noted that the price fluctuations of these contracts often lead changes in U.S. Treasury yields and FedWatch probability curves by about 12--24 hours, becoming forward-looking indicators of market sentiment.

At the same time, Kalshi has achieved institutional breakthroughs along compliant paths. As a prediction market exchange registered with the U.S. Commodity Futures Trading Commission (CFTC), Kalshi completed a $185 million Series C financing (led by Paradigm) in June 2025, with a valuation of about $2 billion; the latest disclosure in October has raised its valuation to $5 billion, with an annualized trading volume growth rate exceeding 200%. The platform launched contracts related to crypto assets in the third quarter, such as "Will Bitcoin close above $80,000 by the end of this month?" and "Will Ethereum ETFs be approved by the end of the year?", marking the formal entry of traditional institutions into the speculative and hedging market for "crypto narrative events." According to Investopedia, its crypto-related contracts have exceeded $500 million in trading volume within two months of launch, providing institutional investors with a new channel to express macro expectations within a compliant framework. Thus, prediction markets have formed a dual-track pattern of "on-chain freedom + compliance rigor."

Unlike early prediction platforms that leaned towards entertainment and political themes, the mainstream market focus in the third quarter of 2025 has significantly shifted towards macro policies, financial regulations, and coin-stock linkage events. Cumulative trading volumes for macro and regulatory contracts on the Polymarket platform exceeded $500 million, accounting for over 40% of the total trading volume for the quarter. Investors maintained high participation in themes such as "Will ETH spot ETFs be approved before Q4?" and "Will Circle's stock price break key levels post-IPO?" The price trends of these contracts have, at times, even led traditional media sentiment and derivative market expectations, gradually evolving into a "pricing mechanism for market consensus."

The core innovation of on-chain prediction markets lies in their ability to achieve event liquidity pricing through tokenization mechanisms. Each prediction event is priced in binary or continuous forms (such as YES/NO Tokens) and maintains liquidity through automated market makers (AMM), enabling efficient price discovery without the need for matching. Settlement relies on decentralized oracles (such as UMA, Chainlink) for on-chain execution, ensuring transparency and auditability. This structure allows almost all social and financial events—from election results to interest rate decisions—to be quantified and traded as on-chain assets, constituting a new paradigm of "financialization of information."

However, alongside rapid development, risks cannot be overlooked. First, oracle risk remains a core technical bottleneck for on-chain prediction markets; any delay or manipulation of external data could trigger contract settlement disputes. Second, unclear compliance boundaries still restrict market expansion, as the U.S. and EU have not fully unified their regulatory stances on event-based derivatives. Third, some platforms still lack KYC/AML processes, potentially leading to compliance risks regarding the sources of funds. Finally, liquidity is overly concentrated on leading platforms (with Polymarket accounting for over 90% of the market), which could lead to price deviations and amplified market volatility in extreme conditions.

Overall, the performance of prediction markets in the third quarter indicates that they are no longer marginalized "crypto plays," but are becoming an important carrier of macro narratives. They serve as an immediate reflection of market sentiment and also as intermediary tools for information aggregation and risk pricing. Looking ahead to the fourth quarter, prediction markets are expected to continue evolving along the dual-loop structure of "on-chain × compliance": the on-chain segment of Polymarket will rely on DeFi liquidity and macro narrative trading for external expansion; the compliant path of Kalshi will accelerate the attraction of institutional capital through regulatory recognition and dollar-denominated mechanisms. With the proliferation of data-driven financial narratives, prediction markets are transitioning from the attention economy to decision-making infrastructure, becoming a rare new asset layer in the financial system that reflects collective sentiment while possessing forward-looking pricing functions.