Advantages of Digital Asset Treasury (DAT)
In a statement made during the Bitcoin Asia 2025 conference, Xiao Feng, who holds the position of Chairman and CEO at HashKey Group, highlighted the advantages of utilizing a Digital Asset Treasury (DAT) as a method for processing cryptocurrency transactions off the blockchain. He compared DAT’s benefits with those associated with exchange-traded funds (ETFs), explaining that there are four significant advantages to consider.
Key Benefits of DAT
1. Enhanced Liquidity: Unlike ETFs that involve lengthy creation and redemption procedures, DAT enables smoother and faster asset transfers for investors.
2. Greater Price Elasticity: DAT exhibits a greater degree of price elasticity, displaying more substantial fluctuations in market value and incorporating features that help isolate risks, thereby offering institutional investors better arbitrage opportunities.
3. Effective Leverage Structure: The leverage structure of DATs is designed to be more effective. Companies operating under a DAT model provide leverage financing that can yield higher returns for investors relative to the price appreciation seen in cryptocurrencies.
4. Inbuilt Price Protection Strategy: DATs come with an inbuilt price protection strategy, allowing investors to purchase Bitcoin or ETFs at discounted prices when the market value dips below the net asset value held by the company. Such discrepancies are typically corrected quickly by market forces, ensuring that prices remain aligned.
Conclusion
In summary, while Xiao Feng acknowledged the merits of crypto ETFs, he strongly advocated for the superiority of the Digital Asset Treasury as a more efficient and beneficial alternative for engaging with digital assets.
