Digital asset treasuries (DATs) were among the most visible corporate phenomena of the last bull cycle. Built on the premise that holding bitcoin on the balance sheet was itself a value-generating strategy, many attracted strong market premiums simply by accumulating BTC faster than competitors.
But as valuations normalize and net asset values (NAVs) tighten, DATs are discovering that passive exposure may no longer be enough.
“There’s been this collective realization as NAVs start to squeeze,” Matt Luongo, co-founder and CEO of Bitcoin finance platform Mezo, told CoinDesk in an interview. “Most of them don’t actually have an edge over anyone else in buying bitcoin — you can go do that yourself. Now they need to earn yield and deploy strategies retail might not know about yet.”
Some DATs that boomed into public markets now face a different environment: one in which investors increasingly expect operational performance or revenue generation, not just BTC appreciation. Even corporate bellwethers of bitcoin strategy have faced similar pressure. Across the category, the argument that simply holding bitcoin is no longer the full business model has strengthened.
Brian Mahoney, Mezo’s co-founder, adds that DATs also face a narrative constraint. “These companies want the yields that exist in ecosystems like Ethereum or Solana, but they can’t go there,” he said. “It’s a violation of the story they’ve told shareholders. You can’t claim to be a Bitcoin-native treasury while earning your yield from ether staking.”
A new institutional question: what can Bitcoin do?
Anchorage Digital, the federally chartered crypto bank that serves institutions from hedge funds to public companies, is seeing a shift in the kinds of questions clients are asking.
“If all you want is price exposure, there are plenty of ways to get that,” Anchorage Digital CEO Nathan McCauley said in an emailed comment. “But institutions increasingly want their bitcoin to be productive — to earn rewards, unlock liquidity, or serve as collateral. They want infrastructure that lets them interact with the Bitcoin economy directly, securely and in full compliance.”
Through Anchorage’s self-custody wallet, Porto, clients lock up BTC to earn on-chain rewards or borrow against their holdings. “We’re enabling institutions to put bitcoin to work without selling it, without moving into unregulated environments, and without compromising on custody,” McCauley said.
The growth of BTCFi — from around $200 million in total value locked last October to a peak of around $9 billion in early October — reflects rising interest, but McCauley notes 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.
Across these groups, he sees consistent demands: “predictable economics, clear collateral mechanics and fully explainable risk.” The first offering via Porto — borrowing against BTC at a fixed rate on Mezo — fits that profile, with staking to follow, he said.
The coming inflection point
The next 12–24 months may mark a meaningful acceleration in BTCFi participation if several structural pieces fall into place.
“The inflection point arrives 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 map to institutional thinking. “When those pieces align,” he said, “you can easily see tens of billions of institutional BTC shift from passive holding to productive deployment.”
Luongo believes this shift is already happening behind closed doors. Conversations with CEOs in the space, he said, reflect a sense of urgency not driven by price but by competitive pressure. “Big banks we thought would move slowly are coming in six to 18 months,” he said. “Behind the scenes, deals are happening fast.”
Mahoney points to fintech convergence as another accelerant: traditional finance front-ends plugging into tokenized rails, with users interacting with crypto without realizing it.
A new partnership between Anchorage Digital and Mezo offers institutions a pathway into BTCFi. Through Porto, institutions can now borrow against their BTC using Mezo’s MUSD stablecoin at fixed rates starting at 1%.
Borrowing via MUSD is live today, while veBTC rewards will roll out soon across Porto and Anchorage’s broader platform.
