DATs See $2.6B Inflows as Fed Cut & FASB Rules Fuel Institutional Rush

The data from DeFiLlama reveals a powerful institutional pivot. In the week of December 8-14, DATs saw $1.36 billion in net inflows, with a preliminary follow-up of $1.29 billion from December 15-21, bringing the two-week total to over $2.6 billion. This capital movement is not a speculative flurry but a calculated response to two significant catalysts. According to Jimmy Xue, Co-Founder & COO of quantitative yield protocol Axis, the primary driver is the Federal Reserve’s December 10 rate cut. This policy shift injected fresh liquidity into markets and, critically, lowered the cost of leverage for institutional arbitrageurs, making large-scale treasury maneuvers more economical.

Xue highlighted a concurrent and equally powerful regulatory catalyst: the new Financial Accounting Standards Board (FASB) accounting standard, ASU 2023-08, which took mandatory effect this year. This rule change is transformative, allowing companies for the first time to report cryptocurrency price appreciation as net income. ‘While the timing is a tactical, year-end move to optimize FY2025 balance sheets, it signals a structural reversal toward treating digital assets as a permanent category of marketable securities,’ Xue told Decrypt. This combination of cheaper capital and favorable accounting treatment has created a potent incentive for institutional balance sheet allocation.

The distribution of the inflows offers a clear window into institutional strategy. The overwhelming concentration was in Bitcoin and Ethereum, with $940 million and $423 million flowing into their respective trusts in the first measured week alone. Xue describes this as a definitive ‘flight to quality’ toward assets with the deep, established liquidity required for moving billions in treasury capital safely. This preference for core, liquid assets underscores a risk-aware approach even amidst bullish accumulation.

However, the data also shows targeted forays into niche narratives. Alongside the giants, Bittensor (TAO) saw a $724,000 inflow, while Solana (SOL) products experienced a minor $2.55 million outflow. The Bittensor inflow is directly tied to a specific catalyst: its December 12 halving event and the concurrent launch of the Grayscale Bittensor Trust. This pattern suggests institutional appetite is bifurcated—dominated by broad index-like exposure to Bitcoin and Ethereum, but with room for high-conviction, event-driven bets on specific protocols, rather than broad diversification across the crypto spectrum.

These massive inflows are having a direct mechanical impact on the DAT structures themselves. A key metric for these trusts is the market net asset value (mNAV), where a figure below 1.0 indicates the trust’s shares are trading at a discount to the underlying asset value. Jimmy Xue notes that the influx of capital is ‘narrowing the 10–15% discount,’ as cheaper leverage allows investors to use DATs as vehicles to effectively buy Bitcoin and Ethereum at a discount. This dynamic is visible in the case of Bitcoin treasury company Strategy. Despite acquiring nearly $2 billion worth of Bitcoin in two transactions in early December, its mNAV has continued to decline, hovering around 0.91. This discount poses challenges for raising fresh capital, a sentiment reflected on the prediction market Myriad, where users assign only a 32% chance that Strategy’s mNAV will recover to 1.5.

Looking ahead, analysts argue this validates the DAT structure’s competitive edge against the newer spot Bitcoin ETFs. For 2026 and beyond, Xue contends DATs remain viable because they ‘can capture native staking yield, a feature most US spot ETFs cannot legally offer, and utilize assets for strategic M&A.’ This capability allows DATs to evolve into ‘active yield’ vehicles, generating returns through staking rewards (particularly relevant for Ethereum) and corporate strategy, offering a level of capital efficiency and active management that passive ETF structures cannot replicate. As evidenced by Strategy’s launch of a $1.44 billion cash reserve to pay dividends without selling Bitcoin, these entities are building financial engineering tools that extend far beyond simple asset custody.