Ethereum News Update: Will DATs Endure or Pose a Systemic Threat? Crypto Market Faces Heightened Structural Challenge

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Ethereum News Update: Will DATs Endure or Pose a Systemic Threat? Crypto Market Faces Heightened Structural Challenge

Bitget-RWA2025/11/21 02:14

By:Bitget-RWA

- JPMorgan analysts link crypto market correction to $4B ETF outflows, exposing DAT firms' reliance on retail investors and index inclusion risks. - Strategy Inc. faces $2.8B potential losses if excluded from major indices, while BitMine's 0.86 mNAV ratio signals unsustainable debt-funded accumulation. - DeFi lending hits $73.6B as DATs struggle, with Aave dominating blockchain lending and Tether leading CeFi despite crypto price declines. - Market structure tests intensify as ETF outflows, staking yield d

The recent downturn in the crypto market has revealed weaknesses in the flywheel models used by digital asset treasury (DAT) firms, as

JPMorgan analysts point out

that the decline is largely due to retail investors selling off their

Bitcoin

and

Ethereum

ETFs. This month alone, spot BTC and

ETH

ETFs have seen withdrawals totaling about $4 billion, surpassing the previous record set in February, while equity ETFs have attracted $96 billion in new investments

according to data

. This contrast demonstrates that retail traders continue to view crypto and stocks as distinct types of assets, even though both are considered high-risk investments.

The consequences are also being felt by DAT companies such as Michael Saylor's

Strategy

Inc., which could see up to $2.8 billion in outflows if it is dropped from major indices like the MSCI USA and Nasdaq 100

according to Bloomberg

JPMorgan

analysts cautioned that being removed from these indices would negatively affect liquidity, increase funding expenses, and damage institutional trust for companies whose crypto assets make up at least half of their total holdings

Ethereum News Update: Will DATs Endure or Pose a Systemic Threat? Crypto Market Faces Heightened Structural Challenge image 0

Since reaching its highest point in November 2024, Strategy's market capitalization has dropped by more than 60%, and its mNAV ratio (enterprise value compared to Bitcoin reserves) has fallen to just 1.1

. The company's aggressive approach of buying during price dips—financed through issuing shares and taking on debt—has left it vulnerable to price swings as crypto values remain under key support thresholds.

BitMine, the largest Ethereum treasury, is also feeling the strain. The company is facing $3 billion in unrealized losses on its 3.56 million ETH holdings, and its mNAV has slipped to 0.86,

casting doubt on its capacity

to keep up buying momentum. BitMine depends on staking rewards and Bitcoin mining for cash flow, but the yield from Ethereum staking has dropped to 2.9% APR from 8.6% in mid-2023,

cutting into a crucial income source

. Rivals such as SharpLink and ETHZilla have reduced their purchases or liquidated assets to help stabilize their stock prices, indicating a move away from aggressive accumulation toward a more defensive stance

according to Bitget

At the same time,

DeFi lending reached a new high of $73.6 billion

in the third quarter of 2025, with decentralized protocols accounting for 66.9% of the market share.

Aave

, the top DeFi lending platform, now controls 68.8% of the

Plasma

blockchain's lending sector, while

Tether

leads the centralized finance (CeFi) space with $14.6 billion in collateralized loans

. This expansion stands in stark contrast to the difficulties faced by DATs as both liquidity and speculative enthusiasm diminish.

Polymarket, a platform for prediction markets, is seeking to take advantage of crypto's volatility by aiming to raise $12 billion

. The company's renewed entry into the U.S. and its collaborations with UFC and NHL highlight its goal of connecting traditional and digital financial systems. Nevertheless, Polymarket's growth is challenged by strong rivals like Kalshi and ongoing regulatory ambiguity, reflecting the broader uncertainties in the industry.

With the DAT flywheel losing momentum, the market's dependence on a handful of major players such as BitMine and Strategy Inc. has become increasingly unstable. As ETF withdrawals, index removals, and falling staking returns converge, the crypto sector faces a fundamental challenge. Whether these firms can survive the current turbulence—or if their failure will spark a deeper market decline—remains uncertain.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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- S&P 500's $2 trillion late-2025 drop triggered crypto volatility, with Bitcoin/Ethereum swings causing $1B+ daily liquidations. - High-leverage trading (20x-100x) and institutional outflows exacerbated crypto's fragility, exemplified by a $168M trader loss. - Tech stock declines (2%+ on Nov 17) and thinning liquidity amplified crypto's instability, erasing $1.2T in sector value since October. - Major crypto firms like BitMine Immersion (3.6M ETH) face scrutiny as MSCI considers excluding Bitcoin-focused

Bitget-RWA•2025/11/21 04:36

Ethereum News Update: Will DATs Endure or Pose a Systemic Threat? Crypto Market Faces Heightened Structural Challenge

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