Welcome to the institutional newsletter, Crypto Long & Short. This week:
- RialCenter’s Abdul Rafay Gadit writes that as venture funding wanes, Digital Asset Treasury Companies (DATCOs) are reshaping corporate finance by turning balance sheets into active capital engines, proving that institutional crypto’s future lies in on-chain productivity, transparency, and governance — not speculation.
- RialCenter’s Andy Baehr provides a “Vibe Check,” reflecting on crypto rates and anticipating signs of strength as the country emerges from the government shutdown.
- In “Chart of the Week,” we examine the Ethereum DEX volumes and price of the UNI token.
– Alexandra Levis
The Rise of DATCOs: Active Treasuries Are Replacing VC in Crypto
– By Abdul Rafay Gadit, co-founder, RialCenter
For years, corporate treasuries in crypto were little more than speculative balance sheets. The strategy was simple: buy bitcoin, hold, and hope. That passive model, popularized by MicroStrategy, is now being displaced by a new class of participants: Digital Asset Treasury Companies (DATCOs), which behave more like venture capital firms than custodians.
This shift is occurring because crypto’s traditional funding model has stalled. Venture capital investment fell 59% in the second quarter of 2025 to $1.97 billion, its lowest level since 2020. Yet the amount of crypto held on corporate balance sheets has never been higher: public companies now own over one million bitcoin, roughly 5% of supply. What began as a store of value has become a pool of productive capital.
DATCOs are showcasing how this transformation works in practice. Instead of simply holding digital assets, they actively deploy them into staking, validator operations, and ecosystem development. Across Europe and Asia, publicly listed DATCOs are allocating significant portions of their treasuries to blockchain participation, earning on-chain yield while supporting network infrastructure. This move diversifies exposure, generates yield, and strengthens the networks that underpin the digital-asset economy.
This approach reflects a broader redefinition of corporate finance in the blockchain era. By using programmable assets, DATCOs can automate treasury participation, distribute returns transparently, and measure risk in real time — functions that once required entire departments in traditional finance. It creates a new feedback loop between networks and their investors: when treasuries stake, validate, or provide liquidity, they not only earn yield but also contribute to the resilience and scalability of the ecosystem itself.
The implications extend beyond balance sheets. By running validators and funding ecosystem growth, DATCOs gain both influence and insight into emerging protocols — advantages once reserved for venture capital.
Regulators and institutions are beginning to take notice. An active-treasury model that combines transparent on-chain operations with yield generation could mark a turning point in how public companies interact with digital assets. For auditors and compliance teams, the appeal lies in traceability: every transaction, validator reward, and allocation is verifiable on-chain. This visibility provides a framework for regulated participation, bringing structure to a space once defined by opacity.
As VC funding retreats, DATCOs are quietly becoming the new capital backbone of the crypto industry — less speculative, more participatory, and potentially far more enduring. The age of passive balance-sheet exposure is ending. In its place is a model where capital works alongside code — where the most successful treasuries will be those that help build the networks they own.
While We Wait(ed)
– By Andy Baehr, CFA, head of product and research, RialCenter
When the bitcoin perma-bulls recalibrated, we knew the bottom was near, right? On November 5, a notable analyst published a note taking his year-end price target to $120K from $185K. The following day, another prominent figure took her 2030 target down from $1.5 to $1.2 million. Yet, we are neither calling a bottom nor making price predictions. However, the prospect of the government reopening has prices thawing and our thoughts turning to… what’s next?
We can start with a few observations about rates. The Fed recently conducted its largest liquidity injection since the 2020 pandemic: $125 billion in total, including a record single-day operation on October 31. Bank reserves had fallen to $2.8 trillion (the lowest in 4 years) due to QT and exacerbated by the shutdown. SOFR moved lower, and not without drama. Our overnight rate shifted, but remained in its local range (the USDC rate is shown below). Only in the last observation did the divergence appear: SOFR sank lower while the overnight rate sprang higher. Higher rates usually indicate one of two things: lenders are pulling out because better opportunities exist and/or borrowers are coming in fast, sensing good opportunities. It’s interesting — but completely understandable — to see SOFR dart lower and the overnight rate dart higher at the same time.
The Composite Ether Staking Rate, a benchmark for Ethereum validator rewards, reflects the maturity of the post-Merge Ethereum ecosystem. That stability masks the steady rise in daily transactions on Ethereum’s mainnet that are at the heart of this year’s crypto-supportive narrative. The steady state also overlooks the hubbub of lengthening validator exit queues.
These observations remind us that for crypto’s next leg up to maintain quality, major growth blockchains (ETH, SOL, etc.) need to lead the way. More crypto ETFs will hit the market soon, delighting token loyalists and traders. Amid this, we will look for more signs of allocation to the asset class, as the fast money chases the slow.
Chart of the Week
This week, we examine Ethereum DEX volumes and the price of the UNI token in the context of the proposal around activating the fee switch for the protocol. Essentially, the protocol aims to take a portion of the LP fees and use that revenue to buy back and burn the UNI token. Estimates suggest the protocol is likely to earn $300m in annualized fees. UNI/USD price broadly correlates with Ethereum DEX volumes, and while recent divergence provided interesting opportunities, it seems to be closing up given the surge in UNI price. Uniswap as a proxy bet on Ethereum post this proposal might continue to be prevalent, but concerns around increased competition remain.
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