Digital Asset Treasuries are crypto’s latest hype — and maybe its next bubble

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2 hours ago

December 2, 2025

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The term Digital Asset Treasury companies, known as DATs or DATCOs, has emerged as one of the biggest buzzwords in the digital currency industry this year, providing investors with a novel way to play crypto — but with new risks.

A DAT is effectively a publicly-listed entity that holds cryptocurrencies like bitcoin or ether and provides investors with exposure to the underlying digital currency. DATs aim to outperform the price action of the cryptocurrency that they hold.

But with crypto markets seeing a big plunge in recent weeks, the strategies of DATs has come under scrutiny and raised concerns about whether they could add further pressure to an already weak crypto market.

What is a DAT?

A Digital Asset Treasury is a type of company that buys and holds cryptocurrencies directly on its balance sheet. Investors can buy shares of that entity to get exposure to the underlying digital asset.

The original — and one of the biggest DATs — is Michael Saylor’s Strategy which began buying bitcoin in 2020 and has done so ever since.

But more recently, there has been an explosion of this type of vehicle. In 2021, fewer than 10 companies held bitcoin in their treasuries, according to DLA Piper. That number has since jumped to 190 companies, while another 10 to 20 firms are focused on alternative digital assets as of September, DLA Piper said.

These DATs hold around $100 billion worth of cryptocurrencies combined, according to data from The Block.

Why do DATs exist?

The DAT explosion this year has been driven by buoyant crypto markets and more favorable regulation in the United States toward the industry.

But their growth has also come at a time when it’s easier than ever to buy cryptocurrencies directly or invest in the asset via other regulated entities like exchange-traded funds (ETFs).

DATs are intended to outperform the underlying assets which they hold. They can achieve this through various strategies to maximise returns. In contrast, ETFs effectively hold the cryptocurrency passively and issue shares backed one-to-one with the actual asset.

Should any of the key variables — investor sentiment, crypto prices, or capital market liquidity — fall, the DATCO model could unravel.

DATs can also provide regulatory certainty to investors, according to a note from Macquarie published last week. They “package crypto assets within SEC-regulated securities,” the investment bank’s analysts said. “This eliminates regulatory ambiguity and ensures the same public reporting, disclosures, and investor protections as any public equity.”

Carol Alexander, professor of finance at Sussex University, told CNBC that DATs also offer an option to “institutional and professional investors with regulatory, fiduciary or operational constraints that make direct token ownership or crypto ETFs unsuitable.”

DAT strategies

DATs offer unique capabilities that ETFs cannot, employing a range of strategies to enhance investor returns.

To assess the performance of these DATs, a metric known as market net asset value, or mNAV, is closely watched. It compares a company’s enterprise value to the value of its digital asset holdings. It can show how much of a premium investors are assigning to a DAT, with an mNAV over 1 signifying a premium.

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DATs can use an at-the-market (ATM) equity program to increase their crypto holdings. When its share price exceeds the net asset value of the crypto holdings, a DAT can issue more shares at a premium and therefore raise cash. That allows the DAT to fund the purchase of more crypto — as has been the case for Strategy.

“This creates a crypto-per-share accretive feedback loop: the issuer raises equity, accumulates tokens, and sees its NAV per share increase, further increasing the premium, representing accretive dilution,” Macquarie explained.

Staking is another strategy that is employed by DATs. It allows a holder of cryptocurrency to earn yield, similar to interest, on their assets. To stake, an investor effectively locks up their crypto on a blockchain to help the network run better. In return, the investor receives a return in the form of more crypto. However, unstaking crypto can take several weeks, which may limit ETFs and similar products from fully embracing staking, given their need for liquidity and stable asset values.

Staking creates free cash flow that “can be redeployed into mergers and acquisitions (M&A), token purchases, on-chain opportunities, or shareholder distributions,” ARK Invest said in a note last month.

As the market advances, there are likely to be new trading strategies employed by DATs.

What happens to DATs when the market plunges?

DATs have come into focus amid recent crypto market turmoil, with bitcoin well off its all-time high.

As crypto prices fall, mNAV may fall under 1, meaning companies are trading at a discount to their crypto holdings. This can create a number of issues.

“When the crypto market pulls back, DATCOs face pressure and they have a limited menu of realistic responses,” Alexander said.

“Some may double‑down and hold, viewing the drop as a buying opportunity for future appreciation. Others may need liquidity, especially those that used financing (e.g. debt, convertible bonds, share issuance) which can force them to sell part of their token holdings.”

And an mNAV premium is key for the DAT market.

“The viability of DATCOs is closely tied to the persistence of an equity premium to NAV. If this premium erodes or reverses to a discount, the model faces significant challenges,” Macquarie analysts said.

Strategy cuts full-year bitcoin yield and profit outlook amid crypto pullback: CNBC Crypto World

The investment bank also notes that if a DAT’s stock price falls or near NAV, equity issuance becomes dilutive, meaning “new shares issued no longer increase crypto per share, but rather dilute existing shareholders’ exposure. This can break the self-reinforcing cycle that sustains the premium.”

Meanwhile, the explosion in the number of DATs and growing interest from investors creates its own risks.

“The sector is becoming increasingly crowded, with capital flowing in according to an established playbook. This influx, however, increases structural fragility. Should any of the key variables – investor sentiment, crypto prices, or capital market liquidity – fall, the DATCO model could unravel,” Macquarie said.

Strategy has sought to protect itself against the downturn. On Monday, the company announced a $1.44 billion U.S. dollar reserve that was funded by the sale of more stock. The reserve is designed to support the payment of dividends and service debt, Strategy said.

James Butterfill, head of research at CoinShares, said other DATs may follow Strategy’s decision to dilute shareholders.

“It is not particularly confidence-inspiring: it highlights both their dependence on, and their expectation of, a recovery in token prices,” Butterfill told CNBC.

“We do expect token prices to rebound, particularly if the Federal Reserve delivers a December rate cut, which should help these companies avoid forced liquidations. Nevertheless, the episode underscores the inherent fragility of the DAT model.”

Will DATs impact crypto prices?

If mNAVs continue to fall and DATs don’t have the means to keep afloat, they may turn to selling digital tokens which could put pressure on crypto markets.

“As token prices drop, even the highest‑profile DATs have begun scaling back. This can amplify volatility in the broader crypto markets, because DATs are large holders: their sales, even if staggered, increase supply into already weakened liquidity conditions,” Alexander said.

For now, DATs’ digital currency holdings account for less than 1% of the total crypto market. But as their influence potentially grows, they may have more of an impact on braoder markets.

“As DATCOs scale, their market influence grows; an unwind could weaken a major tailwind for crypto, namely the normalization of digital assets on corporate balance sheets,” Macquarie said. “This, in turn, could dampen public equity interest in digital asset exposure, slow crypto ETF inflows, and pressure cryptocurrency prices.”

Has the DAT bubble burst?

The DAT space is currently in a bubble, according to Sussex University’s Alexander.

“The DATCO model seems to have attracted many entrants driven more by marketing, hype and easy capital than by durable business fundamentals,” she told CNBC.

CoinShares’ Butterfill said the “bubble has already decisively burst,” with many DATs now trading at mNAVs below 1 and a “clear signal that the market fears” these companies will be forced to sell their digital assets.

However, both experts said DATs may evolve in the future.

“Over the longer term, investors are likely to demand a more measured approach,” Butterfill said.

Why there could be a digital asset treasury bubble, according to Capriole's Charles Edwards

“Tolerance for shareholder dilution and for extremely high token concentrations without accompanying revenue streams will diminish. The recent frenzy of token accumulation has, in many ways, undermined the original intent of the DAT concept: credible global companies seeking diversification from fiat-currency and depreciation risks.”

Alexander said that these digital asset treasury firms may also begin to diversify their holdings into non-crypto assets too.

“I believe those that pivot toward operations such as yield‑generation through staking, increasing the diversification of their tokens, and mix with token traditional assets like cash or T-bills, may survive as legitimate digital‑asset infrastructure players,” Alexander said.

Technology

YouTube’s new AI deepfake tracking tool is alarming experts and creators

Published

31 mins ago

December 2, 2025

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YouTube's new AI deepfake tracking tool is alarming experts and creators

Beata Zawrzel | Nurphoto | Getty Images

A YouTube tool that uses creators’ biometrics to help them remove AI-generated videos that exploit their likeness also allows Google to train its artificial intelligence models on that sensitive data, experts told CNBC.

In response to concern from intellectual property experts, YouTube told CNBC that Google has never used creators’ biometric data to train AI models and it is reviewing the language used in the tool’s sign-up form to avoid confusion. But YouTube told CNBC it will not be changing its underlying policy.

The discrepancy highlights a broader divide inside Alphabet, where Google is aggressively expanding its AI efforts while YouTube works to maintain trust with creators and rights holders who depend on the platform for their businesses.

YouTube is expanding its “likeness detection,” a tool the company introduced in October that flags when a creator’s face is used without their permission in deepfakes, the term used to describe fake videos created using AI. The feature is being expanded to millions of creators in the YouTube Partner Program as AI-manipulated content becomes more prevalent throughout social media.

The tool scans videos uploaded across YouTube to identify where a creator’s face may have been altered or generated by artificial intelligence. Creators can then decide whether to request the video’s removal, but to use the tool, YouTube requires that creators upload a government ID and a biometric video of their face. Biometrics are the measurement of physical characteristics to verify a person’s identity.

Experts say that by tying the tool to Google’s privacy policy, YouTube has left the door open for future misuse of creators’ biometrics. The policy states that public content, including biometric information, can be used “to help train Google’s AI models and build products and features.”

“Likeness detection is a completely optional feature, but does require a visual reference to work,” YouTube spokesperson Jack Malon said in a statement to CNBC. “Our approach to that data is not changing. As our Help Center has stated since the launch, the data provided for the likeness detection tool is only used for identity verification purposes and to power this specific safety feature.”

YouTube told CNBC it is “considering ways to make the in-product language clearer.” The company has not said what specific changes to the wording will be made or when they will take effect.

Experts remain cautious, saying they raised concerns about the policy to YouTube months ago.

“As Google races to compete in AI and training data becomes strategic gold, creators need to think carefully about whether they want their face controlled by a platform rather than owned by themselves,” said Dan Neely, CEO of Vermillio, which helps individuals protect their likeness from being misused and also facilitates secure licensing of authorized content. “Your likeness will be one of the most valuable assets in the AI era, and once you give that control away, you may never get it back.”

Vermillio and Loti are third-party companies working with creators, celebrities and media companies to monitor and enforce likeness rights across the internet. With advancements in AI video generation, their usefulness has ramped up for IP rights holders.

Loti CEO Luke Arrigoni said the risks of YouTube’s current biometric policy “are enormous.”

“Because the release currently allows someone to be able to attach that name to the actual biometrics of the face, they could create something more synthetic that looks like that person,” Arrigoni said.

Neely and Arrigoni both said they would not currently recommend that any of their clients sign up for likeness detection on YouTube.

YouTube’s head of creator product, Amjad Hanif, said YouTube built its likeness detection tool to operate “at the scale of YouTube,” where hundreds of hours of new footage are posted every minute. The tool is set to be made available to the more than 3 million creators in the YouTube Partner Program by the end of January, Hanif said.

“We do well when creators do well,” Hanif told CNBC. “We’re here as stewards and supporters of the creator ecosystem, and so we are investing in tools to support them on that journey.”

The rollout comes as AI-generated video tools rapidly improve in quality and accessibility, raising new concerns for creators whose likeness and voice are central to their business.

YouTuber Doctor Mike, whose real name is Mikhail Varshavski, makes videos reacting to TV medical dramas, answering questions on health fads and debunking myths that have flooded the internet for nearly a decade.

Doctor Mike

YouTube creator Mikhail Varshavski, a physician who goes by Doctor Mike on the video platform, said he uses the service’s likeness detection tool to review dozens of AI-manipulated videos a week.

Varshavski has been on YouTube for nearly a decade and has amassed more than 14 million subscribers on the platform. He makes videos reacting to TV medical dramas, answering questions on health fads and debunking myths. He relies on his credibility as a board-certified physician to inform his viewers.

Rapid advances in AI have made it easier for bad actors to copy his face and voice in deepfake videos that could give his viewers misleading medical advice, Varshavski said.

He first encountered a deepfake of himself on TikTok, where an AI-generated doppelgänger promoted a “miracle” supplement.

“It obviously freaked me out, because I’ve spent over a decade investing in garnering the audience’s trust and telling them the truth and helping them make good health-care decisions,” he said. “To see someone use my likeness in order to trick someone into buying something they don’t need or that can potentially hurt them, scared everything about me in that situation.”

AI video generation tools like Google’s Veo 3 and OpenAI’s Sora have made it significantly easier to create deepfakes of celebrities and creators like Varshavski. That’s because their likeness is frequently featured in the datasets used by tech companies to train their AI models.

Veo 3 is trained on a subset of the more than 20 billion videos uploaded to YouTube, CNBC reported in July. That could include several hundred hours of video from Varshavski.

Deepfakes have “become more widespread and proliferative,” Varshavski said. “I’ve seen full-on channels created weaponizing these types of AI deep fakes, whether it was for tricking people to buy a product or strictly to bully someone.”

At the moment, creators have no way to monetize unauthorized use of their likeness, unlike the revenue-sharing options available through YouTube’s Content ID system for copyrighted material, which is typically used by companies that hold large copyright catalogs. YouTube’s Hanif said the company is exploring how a similar model could work for AI-generated likeness use in the future.

Earlier this year, YouTube gave creators the option to permit third-party AI companies to train on their videos. Hanif said that millions of creators have opted into that program, with no promise of compensation.

Hanif said his team is still working to improve the accuracy of the product but early testing has been successful, though he did not provide accuracy metrics.

As for takedown activity across the platform, Hanif said that remains low largely because many creators choose not to delete flagged videos.

“They’ll be happy to know that it’s there, but not really feel like it merits taking down,” Hanif said. “By and far the most common action is to say, ‘I’ve looked at it, but I’m OK with it.'”

Agents and rights advocates told CNBC that low takedown numbers are more likely due to confusion and lack of awareness rather than comfort with AI content.

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Technology

MongoDB stock skyrockets 27% on AI, cloud database platform growth

Published

50 mins ago

December 2, 2025

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MongoDB stock skyrockets 27% on AI, cloud database platform growth

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MongoDB shares ripped more than 25% higher on Tuesday after the company blew past Wall Street’s third-quarter expectations and lifted its forecast as its cloud database platform gained traction with customers.

The database software provider posted adjusted earnings of $1.32 per share on $628 million in revenue. That topped the 80 cents adjusted per share and $592 million in revenue expected by analysts polled by LSEG. Revenues grew 19% from last year.

MongoDB said its Atlas platform grew 30% from a year ago and accounted for 75% of total revenues for the quarter. The company said it ended the period with more than 60,800 Atlas customers, with revenues expected to grow 27% for the platform in the current period.

“Q3 was an exceptional quarter that was driven by our continued go-to-market execution and the broad-based demand we are seeing across business,” said CEO Chirantan “CJ” Desai in his first earnings call at the helm of the company.

Dev Ittycheria, who ran the company for 11 years and took it public, stepped down in November.

Former cyber spy raises $60 million to fight AI threats

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1 hour ago

December 2, 2025

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Former cyber spy raises million to fight AI threats

Ben Seri (CTO), Sanaz Yashar (CEO), Snir Havdala (CPO) of Zafran Security.

Courtesy: Eric Sultan | Zafran

Zafran Security, a cybersecurity startup created by an Iranian-born spy whose story helped inspire the hit Apple TV series “Tehran,” has raised $60 million, the company said Tuesday.

Sanaz Yashar, the former spy and CEO of Zafran, told CNBC that the funding round comes as a result of the accelerating speed and pace of cyberattacks due to the on-going AI boon. Zafran uses artificial intelligence and automation technology to manage threat exposure.

It’s “becoming much more severe that it was even a year ago,” she said in an exclusive interview.

The round brings Zafran’s total funding to $130 million since its founding in 2022. Zafran did not disclose the valuation at which it raised, but the startup said it has more than tripled annual recurring revenue since its last round for $70 million in September 2024. Annual recurring revenue is a term often used to measure income expected on a 12-month basis for a product.

The company plans to use the money to hire more people, Yashar said.

Menlo Ventures led the funding round, with participation from Sequoia Capital and Cyberstarts, which was an early investor in the startup Wiz that sold to Google for $32 billion in March.

Companies are looking for ways to reinvigorate their cybersecurity capabilities as AI reshapes the sophistication and capabilities of cyber criminals.

Besides Wiz, Palo Alto Networks in July announced that it acquired identity security provider CyberArk for $25 billion.

Yashar and co-founders Ben Seri and Snir Havdala created Zafran following an investigation into a ransomware attack on a hospital in Israel.

“The data was there,” Yashar told CNBC, adding that cohesive security tools might have prevented the attack. “If the security tools were talking to each other, they could block it.”

Yashar, who moved to Israel from Tehran at 17, served for 15 years in an elite cybersecurity intelligence unit within the Israel Defense Forces known as Unit 8200. She also led major investigations at threat detection firm FireEye and Mandiant, which Google bought in 2022.

Many famous cybersecurity companies have originated from Unit 8200 alum, including Palo Alto Networks, Check Point Software and CyberArk.