Crypto Treasuries Are Fading—And Staking ETFs Will ‘Eat Their Lunch’: SOL Strategies CEO

Canadian-based SOL Strategies is a publicly traded Solana-centric firm that has stockpiled the community’s native token—nevertheless it doesn’t wish to be confused with the rising record of digital asset treasuries (or DATs) which have merely targeted on accumulating SOL, the community’s native token. 

“Our thesis is that there isn’t any sustainable marketplace for digital asset treasuries,” SOL Strategies Interim CEO Michael Hubbard advised Decrypt. “That is not an fascinating enterprise mannequin.”

“They are a proxy monetary engineering play that largely was pushed by short-term hype. I virtually wish to say greed, however that appears a bit robust,” he added. “I believe we’ll see one or two long-term sustainable or profitable DATs that type of management the narrative, that drive the theme, however staking ETFs are going to eat their lunch.” 

Hubbard stated that whereas the unique DAT thesis of offering publicity to beforehand uninvestible belongings—both based mostly on geography or different restrictions—was an incredible thesis, it has misplaced its luster. 

“Now we have now ETFs that present the identical stage of publicity, however ETFs are much more regulated and have a really identified framework and protections round that,” he added.

ETFs additionally come from identified issuers with managed and outlined bills, he added, whereas DATs can have advanced stability sheets, warrant overhangs, debt converts, and shares in personal placements that haven’t but been registered for resale.

“The worth hole that DATs are filling is narrowing very quickly,” stated Hubbard.

Staking ETFs add an additional profit for buyers by letting them get a share of community staking rewards for proof-of-stake belongings like Solana and Ethereum. The just lately launched Bitwise Solana Staking ETF has seen zero days of outflows since launching in late October, suggesting strong demand for each Solana and staking-enhanced funds.

SOL Strategies was arguably the primary Solana treasury agency, rebranding from Cypherpunk Holdings in September 2024 to decide to a concentrate on the rising layer-1 community and its underlying token, SOL. 

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However the firm maintains that it’s greater than a DAT, as an alternative adopting the DAT++ moniker that lends credence to the model’s validator enterprise. 

Hubbard, who took over as interim CEO in September with the departure of Leah Wald, is targeted on guaranteeing shareholders and potential buyers understand it. 

“What we’re actually making an attempt to convey to the market proper now could be our focus is to seize the worth of the financial system, not the foreign money,” stated Hubbard, talking concerning the agency’s concentrate on the expansion of the Solana community and exercise, versus simply the value of the token. 

“The foreign money [SOL] is a bit of it. It is a pillar of our basis,” he added. “However that is why we have now the working enterprise.”

The agency’s validator operations had greater than 2.8 million SOL or about $364 million in belongings beneath delegation as of its most just lately revealed enterprise replace, incomes a community common of round 6.45% APY in rewards on that delegated stake. 

It additionally manages a digital asset treasury of greater than 526,000 SOL or better than $67 million at right this moment’s costs, putting it among the top publicly listed holders of Solana. 

“Utilizing the DAT++ time period has the adverse consequence that we’re being lumped into that basket,” stated Hubbard of the rising record of Solana treasury companies. “And to be clear, we predict that it is essential and invaluable for us to have a treasury in Solana, as a result of we consider in Solana, the ecosystem and the asset.” 

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However the agency’s interim CEO, who joined in March when it acquired his validator enterprise, Laine, desires to proceed to push the narrative that SOL Strategies is just not purely targeted on the worth of the SOL token, and as an alternative goals to be the corporate that captures the worth of your complete Solana financial system.

“If I needed to, I might say we turn into just like the Berkshire Hathaway of Solana, or the S&P 500 of Solana,” he stated when requested about what success seems like for the agency. “We might be simply accelerating the ecosystem by way of our involvement, however on the similar time additionally capturing the worth of that whole development—and we’re not tied purely to the value of SOL.” 

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Hubbard’s feedback come because the 12 months’s digital asset treasury continues to indicate indicators of weak point. High companies like Bitcoin large Technique and main Ethereum treasury BitMine have seen their stock prices tumble in latest weeks, whereas some DATS have began selling off their crypto holdings in an try to prop up their share costs by way of inventory buybacks.

Shares of SOL Strategies completed up 6% on Friday. Shares within the agency started buying and selling on the Nasdaq earlier this summer season as a part of its cross-listing with the Canadian Securities Trade. 

Solana is down about 33% within the final month, just lately buying and selling round $127 and greater than 56% off its January all-time excessive of $293.