Active Treasuries Are Replacing VC in Crypto

Welcome to the institutional newsletter, Crypto Long & Short. This week:

• ZIGChain’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.
• CoinDesk Indices’ Andy Baehr provides a “Vibe Check,” providing a look back at crypto rates and a look ahead at 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, ZIGChain

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, popularised by MicroStrategy, is now being displaced by a new class of participants: Digital Asset Treasury Companies (DATCOs), that behave more like venture capital firms than custodians.

This shift is happening 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 showing 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. The move not only diversifies exposure but also generates yield and strengthens the networks that underpin the digital-asset economy.

This approach reflects a wider 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 also 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, CoinDesk Indices

When the bitcoin perma-bulls recalibrated, we knew the bottom was near, right? On November 5, Galaxy’s Alex Thorn published a note taking his year-end price target to $120K from $185K. The following day, Cathie Wood took her 2030 target down from $1.5 to $1.2 million. Bitwise’s Matt Hougan maintained his call for a Q4-into-Q1 rally, but not one that would ring the $200K bell he’d previously predicted. NB: We are neither calling a bottom nor making price predictions. Yet, the prospect of the government reopening (really… it takes so little to get us excited) 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 $29.4 billion single-day operation on October 31 through the Standing Repo Facility. 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. CDOR, our CoinDesk Overnight Rate, which draws blockchain information from Aave pools, 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 CDOR sprang higher. Since CDOR rates (and the Aave variable borrow rates on which they are based) are driven solely by the utilization of the Aave lending pools, higher rates usually mean one of two things: 1) lenders are pulling out because better opportunities exist and/or 2) borrowers are coming in fast, sensing, again, good opportunities. It’s interesting — but completely understandable — to see SOFR dart lower and CDOR dart higher at the same time.

CESR, the Composite Ether Staking Rate, is a benchmark for Ethereum validator rewards we have calculated for more than two years. Its stability reflects the maturity of the post-Merge and layer-2 endowed Ethereum ecosystem. That stability, however, masks the steady rise in daily transactions on Ethereum’s mainnet (stablecoins, tokenized assets) that are at the heart of this year’s crypto-supportive narrative. CESR’s steadiness also looks past the hubbub of lengthening validator exit queues, which serve as ETH’s equivalent of “OG bitcoin whale selling!!” alarms.

What these rate observations remind us is that for crypto’s next leg up to maintain the quality we saw in Q2 and Q3, major growth blockchains (ETH, SOL, etc.) need to lead the way. (Inflows into SOL ETFs in a soft tape were a good sign here.) More (and more) crypto ETFs will hit the market soon, delighting token loyalists and traders. In that (exciting, thrilling) noise, we will look for more signs of allocation to the asset class, the fast money chasing the slow.

Chart of the Week

This week, we examine Ethereum DEX volumes and price of the UNI token – in context of the proposal by Uniswap around activation of the fee switch for the protocol. In essence, the protocol is looking to take a cut of the LP fees and use that revenue to buy back and burn the UNI token. CoinDesk Research estimates that at current projections, the protocol is likely to earn $300m in annualized fees – placing it just behind HYPE and PUMP in terms of token buybacks. UNI/USD price broadly correlates with Ethereum DEX volumes – the recent divergence did provide an interesting opportunity but 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 there are concerns around increase in competition, as covered by CoinDesk Research here.

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