Crypto treasury inflows dropped to $180.5 million in May, a 95% decline from April. Bitcoin holdings dominate the inflow landscape amidst changing market dynamics.
In May, investments in digital asset treasury companies (DAT) fell dramatically to $180.5 million, a staggering drop from $4 billion in April. The majority of this amount, approximately $177.85 million, came from firms holding Bitcoin, marking a 95% decline from the previous month and about 93% below the average for the January to May period.
This sharp decrease follows an unprecedented surge in March and April, where inflows reached $4.28 billion and $4 billion, respectively. While Bitcoin-related inflows saw a significant drop, other assets experienced minimal changes, with Zcash and Sui attracting slight inflows, and Litecoin facing an outflow of $1.89 million.
Shift in Market Dynamics
A report from Galaxy indicates that the market downturn in 2025-2026 has led to diminishing premiums for DAT firms, as investors are less inclined to pay inflated prices for access to Bitcoin or Ethereum through stock market channels. An analysis by Everstake highlighted that staking represented about 60% of revenue for firms that provided data, amid total net losses of $1.41 billion across these companies.
Galaxy's analysts have proposed several strategies for the evolution of DAT firms, termed "DAT 2.0":
- Staking and MEV: establishing their own validators for rewards and transaction fees;
- DeFi strategies: engaging in liquidity provision and liquidation arbitrage;
- Basis trading: utilizing futures for risk-neutral returns;
- Mergers and investments: acquiring businesses within the ecosystem for diversification.
An illustrative case of this market shift is Nakamoto's acquisition of BTC Inc. and the UTXO Management division, allowing it to generate revenue independent of Bitcoin price fluctuations.
Experts note that the rise of spot crypto ETFs has diminished the control that public companies had over regulated access to crypto assets. The future success of these firms will hinge on how effectively they manage their balance sheets rather than merely the volume of cryptocurrencies held. Additionally, many corporate Ethereum holders experienced substantial "paper" losses at the start of the year due to market corrections.
