Macro Turning Point for the Crypto Market in 2H 2025: Q3 Uptrend Concludes, Q4 Enters Repricing Phase

The third quarter of 2025 holds pivotal significance for the cryptocurrency market as it bridges the rebound in risk assets since July and further confirms a macroeconomic turning point following the September rate cut. However, entering the fourth quarter, the market has been simultaneously impacted by macro-level uncertainties and structural risks inherent to the cryptocurrency space, causing a sharp reversal in market dynamics and breaking down previously optimistic expectations.

As the pace of inflation slowdown eases, compounded by the longest government shutdown in U.S. history in October and escalating fiscal disputes, the latest FOMC meeting minutes clearly signaled 'caution against premature rate cuts,' causing significant fluctuations in market expectations regarding the policy path. The previously clear narrative of 'a rate-cutting cycle has begun' was swiftly undermined, prompting investors to reprice potential risks such as 'higher rates for longer' and 'soaring fiscal uncertainty.' Repeated revisions of rate-cut expectations significantly increased volatility in risk assets. Against this backdrop, the Federal Reserve also deliberately curbed excessive market expectations to prevent financial conditions from easing too early.

The rise in policy uncertainty, compounded by the prolonged government shutdown, further exacerbated macro-level pressures, creating a dual squeeze on economic activity and financial liquidity:

• GDP growth was significantly dragged down: The Congressional Budget Office estimated that the government shutdown would reduce the annualized real GDP growth rate for Q4 2025 by 1.0% - 2.0%, equivalent to billions of dollars in economic losses.
• Key data shortages and liquidity contraction: The shutdown prevented the timely release of crucial data such as non-farm payrolls, CPI, and PPI, leaving the market in a 'data blackout' and increasing the difficulty of policy and economic assessments; meanwhile, the interruption of federal spending tightened short-term liquidity passively, pressuring risk assets broadly.

Entering November, discussions within the U.S. stock market about whether AI-related sectors have reached a phase of overvaluation continued to heat up. Volatility in high-valuation tech stocks rose, affecting overall risk appetite, making it difficult for crypto-assets to gain spillover support from the U.S. equity Beta side. Although the advanced pricing of interest rate cuts in Q3 had significantly boosted risk appetite, this 'liquidity optimism' weakened noticeably in Q4 due to the impact of government shutdowns and recurring policy uncertainties, pushing most risk assets into a new round of repricing.

Amidst rising macroeconomic uncertainty, the cryptocurrency market also faced its own structural shocks. Between July and August, Bitcoin and Ethereum both breached all-time highs (Bitcoin surged above $120,000; Ethereum touched approximately $4,956 at the end of August), temporarily lifting market sentiment.

However, the large-scale liquidation event by Binance on October 11 became the most severe systemic shock to the crypto industry:

• As of November 20, both Bitcoin and Ethereum experienced significant pullbacks from their highs, with market depth weakening and divergence between bulls and bears widening.
• The liquidity gap caused by the liquidation undermined overall market confidence, with market depth notably declining at the start of Q4. Meanwhile, the spillover effects of liquidations exacerbated price volatility and heightened counterparty risk.

Meanwhile, inflows into spot ETFs and DAT (Digital Asset Treasury) stocks slowed significantly in the fourth quarter, with insufficient institutional buying power to offset the selling pressure caused by liquidations. This led to the cryptocurrency market gradually entering a phase of high-volume turnover and volatility starting from late August, eventually evolving into a more pronounced correction.

Looking back at Q3, the rise in the cryptocurrency market was driven partly by a rebound in overall risk appetite and partly by the positive impact of listed companies promoting DAT strategies. These strategies increased institutional acceptance of cryptocurrency asset allocation, improved the liquidity structure of certain assets, and became one of the core narratives of the quarter. However, as liquidity conditions tightened and price corrections intensified in Q4, the sustainability of DAT-related buying began to wane.

The essence of the DAT strategy lies in companies incorporating tokenized assets into their balance sheets, thereby enhancing capital efficiency through on-chain liquidity, yield aggregation, and staking tools. As more listed companies and funds experiment with partnerships involving stablecoin issuers, liquidity protocols, or tokenization platforms, this model is gradually transitioning from the conceptual exploration phase to practical implementation. Throughout this process, assets such as ETH, SOL, BNB, ENA, and HYPE have demonstrated a trend toward the convergence of 'token-equity-asset' boundaries across various dimensions, highlighting the bridging role of digital asset treasuries within macro liquidity cycles.

However, under the current market conditions, innovative valuation frameworks for DAT-related assets, such as mNAV, have generally fallen below 1, reflecting a discount on the net asset value of on-chain assets. This phenomenon highlights investor concerns regarding the liquidity, yield stability, and valuation sustainability of these assets, also indicating that the tokenization of assets faces certain adjustment pressures in the short term.

At the sector level, multiple segments continue to exhibit strong growth momentum:

• The market capitalization of the stablecoin sector continues to expand, surpassing $297 billion, further solidifying its role as a funding anchor amid macroeconomic uncertainty.
• The Perp sector, represented by HYPE and ASTER, has achieved significant increases in trading activity through innovative transaction structures, including on-chain order matching, optimized funding rate mechanisms, and tiered liquidity frameworks, emerging as one of the primary beneficiaries of capital rotation during the quarter.
• Prediction markets have regained momentum amid fluctuating macro expectations, with Polymarket and Kalshi setting new trading volume records and serving as real-time indicators of market sentiment and risk appetite.

The rise of these sectors indicates that capital is shifting from single price speculation to structured allocations centered around three core logics: 'liquidity efficiency, yield generation, and information pricing.'

Overall, the dislocation between the crypto and U.S. equity markets in Q3 2025 transitioned into concentrated exposure of structural risks and a comprehensive rise in liquidity pressures by Q4. The government shutdown delayed the release of key macroeconomic data, exacerbating fiscal uncertainties and weakening overall market confidence. Debates over AI valuations in U.S. equities heightened volatility, while the crypto market faced more direct liquidity and depth impacts following Binance's liquidation event. Meanwhile, slowed inflows into DAT strategies and mNAVs falling below 1 across the board highlighted the market’s continued sensitivity to liquidity conditions during institutionalization, with clear vulnerabilities. Whether stabilization can be achieved will largely depend on how quickly the impacts of liquidation events are digested and whether the market can gradually restore liquidity and sentiment stability amid growing long-short divergence.

The expectation of interest rate cuts has been realized, and the market has entered a repricing phase.

In the third quarter of 2025, the key variable in the global macro environment is not the event of 'interest rate cuts' itself, but the generation, trading, and depletion of expectations for such cuts. The market's pricing of the liquidity turning point began as early as July, with the actual policy action instead becoming a node to validate existing consensus.

After two quarters of strategic maneuvering, the Federal Reserve reduced the target range for the federal funds rate by 25 basis points to 4.00%–4.25% at the September FOMC meeting, followed by another minor rate cut in October. However, due to the market's prior strong consensus on interest rate cuts, the marginal impact of the policy move on risk assets was limited, with the signaling effect of the rate cuts largely priced in beforehand. Meanwhile, as inflation’s downward pace slowed and economic resilience exceeded expectations, the Federal Reserve began explicitly expressing concerns about 'the market pre-pricing consecutive rate cuts for next year,' leading to a significant decline in the probability of further rate cuts in December after October. This communication stance emerged as a new variable weighing on market risk appetite.

Macroeconomic data during the third quarter exhibited characteristics of 'moderate cooling':

• The annual core CPI rate declined from 3.3% in May to 2.8% in August, confirming the downward trend in inflation;
• Nonfarm payroll growth remained below 200,000 for three consecutive months;
• The job openings rate fell to 4.5%, the lowest level since 2021.

This set of data indicates that the U.S. economy did not fall into a recession but entered a zone of moderate slowdown, providing the Federal Reserve with policy space for 'controlled rate cuts.' Consequently, the market formed a consensus on 'certain rate cuts' as early as the beginning of July.

According to the CME FedWatch tool, investors' probability of a 25-basis-point interest rate cut in September had exceeded 95% by the end of August, implying that the market had almost fully priced in this expectation in advance. The bond market also reflected this signal:

• The yield on 10-year U.S. Treasury bonds decreased from 4.4% at the start of the quarter to 4.1% at the end of the quarter.
• The decline in the 2-year yield was more pronounced, approximately 50 basis points, reflecting a more concentrated market bet on a policy pivot.

The macro turning point in the third quarter was more characterized by 'expectation digestion' rather than 'policy change.' The pricing of liquidity recovery had largely been completed between July and August, with the actual rate cut in September merely formal confirmation of the existing consensus. For risk assets, the new marginal variable has shifted from 'whether to cut rates' to 'the pace and sustainability of rate cuts.'

However, when the rate cut was finally implemented, the marginal effect of expectations had been fully exhausted, and the market swiftly entered a vacuum phase marked by 'no new catalysts.'

Starting from mid-September, movements in macro indicators and asset prices showed significant dulling:

• The US Treasury yield curve flattened: as of the end of September, the spread between the 10-year and 3-month Treasury yields was only about 14 basis points, indicating that term premia still existed but the risk of inversion had been resolved.
• The US Dollar Index retreated to the 98–99 range, significantly weakening from its year-to-date high of 107, though dollar funding costs remained tight during the quarter-end settlement period.
• Marginal contraction in liquidity for US equities: While the Nasdaq Index continued to rise, ETF inflows slowed and trading volume growth weakened, indicating that institutions have started to adjust their risk exposure at higher levels.

This 'vacuum period after expectation realization' became the most representative macro phenomenon within the quarter. In the first half, the market traded on the 'certainty of rate cuts,' while in the second half, it began pricing in the 'reality of slowing growth.'

The dot plot (SEP) released at the Federal Reserve's September meeting revealed significant divergence among policymakers regarding the future path of interest rates:

• The median expectation for the policy rate by the end of 2025 was revised down to 3.9%.
• The range of forecasts by committee members, which falls between 3.4% and 4.4%, reflects the divergence of opinions among policymakers regarding inflation persistence, economic resilience, and policy space.

Following rate cuts in September and another minor reduction in October, the Federal Reserve’s communication has gradually shifted to a more cautious tone to prevent financial conditions from loosening prematurely. As a result, the probability of an additional rate cut in December, which was previously highly anticipated, has now significantly receded, with the policy path reverting to a “data-dependent” framework rather than a “preset rhythm.”

Unlike previous rounds of 'crisis-driven easing,' this round of rate cuts represents a controlled policy adjustment. While cutting rates, the Federal Reserve continues to pursue balance sheet reduction, signaling its focus on 'stabilizing capital costs and curbing inflation expectations,' emphasizing a balance between growth and price stability rather than actively expanding liquidity. In other words, the turning point for interest rates has been established, but the liquidity inflection point has yet to arrive.

Against this backdrop, markets are exhibiting pronounced divergence. Lower financing costs provide valuation support for some high-quality assets, but broad liquidity has not significantly expanded, with capital allocation trending toward caution.

• Sectors with robust cash flow and earnings support (AI, tech blue chips, and certain DAT-related U.S. equities) have continued their trend of valuation recovery.
• Assets characterized by high leverage, high valuations, or a lack of cash flow support (including some growth stocks and non-mainstream crypto tokens) have lost momentum after expectations were met, with trading activity notably declining.

Overall, the third quarter of 2025 is a period of 'expectation realization' rather than a 'liquidity release phase.' In the first half, markets priced in the certainty of rate cuts, while in the second half, they shifted to re-evaluate slowing growth. The premature consumption of expectations has kept risk assets at elevated levels but without sustained upward momentum. This macroeconomic landscape lays the foundation for subsequent structural divergence and explains the 'breakout-retreat-high volatility' pattern seen in the crypto market during Q3: capital flowed into relatively stable, cash-flow-verifiable assets rather than systemic risk assets.

Explosion and Structural Inflection of Non-Bitcoin DAT Assets

In the third quarter of 2025, Digital Asset Treasury (DAT) evolved from a fringe concept within the crypto industry to one of the fastest-spreading new themes in global capital markets. For the first time, this quarter witnessed public market funds entering the crypto asset space both in scale and through structured mechanisms: via traditional financing instruments such as PIPEs, ATMs, and convertible bonds, tens of billions of dollars in fiat liquidity directly flowed into the crypto market, creating a structured trend of 'crypto-equity linkage.'

The origins of the DAT model can be traced back to MicroStrategy (NASDAQ: MSTR), a pioneer in traditional markets. Starting in 2020, the company became the first to incorporate Bitcoin into its corporate balance sheet and, between 2020 and 2025, cumulatively purchased approximately 640,000 Bitcoin through multiple rounds of convertible bond issuances and ATM offerings, with a total investment exceeding $47 billion. This strategic move not only reshaped the company's asset structure but also established a paradigm where traditional stocks serve as secondary carriers of crypto assets.

Due to the systemic differences in valuation logic between equity markets and on-chain assets, MicroStrategy's stock price has consistently traded at a premium to its Bitcoin net asset value, with the mNAV (market capitalization / on-chain net asset value) consistently ranging between 1.2x and 1.4x. This “structural premium” reveals the core mechanism of DAT (Digital Asset Treasury):

Companies use public market financing to hold crypto assets, enabling fiat capital and crypto assets to form a two-way interconnection and valuation feedback loop at the corporate level.

From a mechanistic perspective, MicroStrategy’s experiment laid the foundation for the three pillars of the DAT model:

• Financing channels: Introducing fiat liquidity through PIPE, ATM, or convertible bonds to provide funding for corporate allocation into on-chain assets;
• Asset reserve logic: Incorporating crypto-assets into financial reporting systems to form an enterprise-level “digital treasury (On-Chain Treasury);”
• Investor access: Allowing traditional capital market investors to gain indirect exposure to crypto-assets via equities, thereby reducing compliance and custody barriers.

These three elements together constitute the “structural loop” of DAT: financing – holding – valuation feedback. Enterprises utilize traditional financial instruments to absorb liquidity, establish reserves of crypto-assets, and then capitalize on equity market premiums to achieve capital enhancement, dynamically rebalancing between capital and tokens.

The significance of this structure lies in the fact that it represents the first time digital assets have entered the balance sheets of the traditional financial system in a compliant manner, introducing a new asset class to capital markets: “tradable on-chain asset mapping.” In other words, enterprises are no longer just participants in the on-chain ecosystem but become structural intermediaries between fiat capital and crypto-assets.

As this model has been validated by the market and rapidly replicated, the third quarter of 2025 marks the second phase of diffusion of the DAT concept: expanding from Bitcoin-centric “store-of-value treasuries” to include productive assets such as Ethereum (ETH) and Solana (SOL) (PoS yields or DeFi returns). This next-generation DAT model centers around the mNAV (market capitalization / on-chain net asset value) pricing framework, incorporating income-generating assets into corporate cash flow and valuation logic, creating an “income-driven treasury cycle.” Unlike early Bitcoin treasuries, ETH, SOL, and similar assets offer sustainable staking yields and on-chain economic activity, making their treasury holdings not only store-of-value but also cash-flow generative. This evolution signifies DAT’s progression from simple asset holding to a capital structure innovation centered on productive returns, serving as a key bridge linking productive crypto-assets to the valuation frameworks of traditional capital markets.

Note: Entering November 2025, a renewed downturn in the crypto market triggered the most systematic repricing of valuations in the DAT sector since its inception. As core assets like ETH, SOL, and BTC experienced rapid drawdowns of 25–35% in October–November, coupled with short-term dilution effects from some DAT companies accelerating balance sheet expansion via ATM offerings, the mNAV of mainstream DAT enterprises generally fell below 1. Companies such as BMNR, SBET, and FORD exhibited varying degrees of “discounted trading” (mNAV≈0.82–0.98), and even MicroStrategy (MSTR), which had long maintained a structural premium, briefly saw its mNAV drop below 1 in November for the first time since launching its Bitcoin treasury strategy in 2020. This phenomenon marks a shift in the market from a period of structural premiums to a defensive phase characterized by “asset dominance and valuation discounting.” Institutional investors widely regard this as the first comprehensive “stress test” for the DAT industry, reflecting the capital market’s reassessment of the sustainability of on-chain asset returns, the pace of treasury expansion, and the long-term impact of financing structures on equity value.

SBET and BMNR Lead the Surge in Ethereum Treasury Adoption

By the third quarter of 2025, the market landscape for Ethereum treasury adoption (ETH DAT) had initially taken shape. Among the key players, SharpLink Gaming (NASDAQ: SBET) and BitMine Immersion Technologies (NASDAQ: BMNR) emerged as two industry-defining leaders. These companies not only replicated MicroStrategy's balance sheet strategy but also achieved a leap from 'concept to institutionalization' in financing structures, institutional participation, and disclosure standards, forming the dual pillars of the ETH treasury cycle.

BMNR: Capital Engineering in Ethereum Treasury Adoption

As of the end of September 2025, BitMine Immersion Technologies (BMNR) had established itself as the world’s largest Ethereum treasury (Ethereum Treasury). According to the company’s latest disclosures, it holds approximately 3,030,000 ETH, which at the closing price of $4,150/ETH on October 1st, corresponds to an on-chain net asset value of approximately $12.58 billion. Including cash and other liquid assets on its balance sheet, BMNR’s total cryptocurrency and cash holdings amount to approximately $12.9 billion.

Based on these estimates, BMNR’s holdings account for approximately 2.4–2.6% of Ethereum’s circulating supply, making it the first publicly listed institution to hold more than 3 million ETH. Its corresponding stock market capitalization is approximately $11.2–11.8 billion, yielding an mNAV ≈ 1.27×, the highest valuation among all digital asset treasury (DAT) listed companies currently.

BMNR’s strategic advancement is closely tied to its organizational restructuring. Under the full oversight of Chairman Tom Lee (co-founder of Fundstrat), who took charge of capital operations in mid-2025, the company articulated a core thesis: “ETH is the future institutional sovereign asset.” Under his leadership, the company completed a structural transformation from a traditional mining enterprise to one with “ETH as its sole reserve asset and PoS yield as the core cash flow,” becoming the first U.S.-listed company to adopt Ethereum staking rewards as its primary operating cash flow.

In terms of financing, BMNR demonstrated rare intensity and execution efficiency. The company expanded its funding sources simultaneously through public markets and private placements, providing long-term support for its Ethereum treasury strategy. This quarter, BMNR not only set a new pace for fundraising in traditional capital markets but also laid the institutional groundwork for the securitization of on-chain assets.

On July 9, BMNR filed a Form S-3 registration statement and signed an At-the-Market (ATM) issuance agreement with Cantor Fitzgerald and ThinkEquity, with an initial authorized limit of $2 billion. Just two weeks later, on July 24, the company disclosed in an SEC 8-K filing that it had increased this limit to $45 billion in response to positive market feedback on its ETH treasury model. On August 12, BMNR submitted a supplemental filing to the SEC, raising the total ATM limit to $245 billion (an additional $200 billion), specifying that the proceeds would be used to purchase ETH and expand its PoS staking asset portfolio.

These limits represent the maximum amount BMNR is authorized by the SEC to issue stock at market price and do not equate to actual cash raised.

At the capital deployment level, the company has completed several definitive transactions:

• In early July 2025, a PIPE private placement of $2.5 billion was completed to fund the initial Ethereum position-building.
• On July 22, ARK Invest (Cathie Wood) disclosed the purchase of approximately $182 million worth of BMNR common stock, with $177 million in net proceeds directly used by the company to increase its Ethereum holdings.
• Founders Fund (Peter Thiel) filed with the SEC on July 16 to report a 9.1% stake. Although this did not involve new financing, it reinforced institutional consensus at the market level.

In addition, BMNR has cumulatively sold approximately $4.5 billion worth of shares under its early ATM authorization, with actual fundraising significantly exceeding the initial PIPE amount. As of September 2025, the company has mobilized billions of dollars through multiple channels including PIPE + ATM, continuing to advance its long-term expansion plans within the overall $24.5 billion authorized framework.

BMNR's financing system exhibits a clear three-tier structure:

• Capital Layer with Confirmed Funding – Completed PIPE and targeted institutional subscriptions, with a scale of approximately $450–500 million.
• Market Expansion Layer – Gradual stock sales through an ATM mechanism, with actual fundraising reaching billions of dollars.
• Potential Ammunition Layer – An SEC-approved total ATM capacity of $24.5 billion, providing upper-limit flexibility for subsequent Ethereum treasury expansion.

Through this layered capital structure, BMNR has rapidly established a reserve scale of approximately 3.03 million Ethereum (valued at around $12.58 billion), transitioning its treasury strategy from a 'single-position experiment' to 'institutionalized asset allocation.'

The sources of BMNR's valuation premium mainly include two layers of logic:

• Asset-level premium: The annualized PoS staking yield remains stable at 3.4–3.8%, forming a reliable anchor for cash flow.
• Capital-level premium: As a 'compliant ETH leverage channel,' its stock price typically leads the Ethereum (ETH) spot price by 3–5 trading days, serving as a leading indicator for institutional tracking of the ETH market.

In terms of market behavior, BMNR's stock price reached an all-time high in sync with ETH during the third quarter and repeatedly drove sector rotation. Its high turnover rate and velocity of circulating shares indicate that the DAT model is gradually evolving into a tradable 'on-chain asset mapping mechanism' within the capital markets.

SBET: A Transparent Example of Institutional Treasury Management

Compared to BitMine Immersion Technologies (BMNR)'s aggressive balance sheet expansion strategy, SharpLink Gaming (NASDAQ: SBET) opted for a more prudent and institutionalized treasury path in Q3 2025. Its core competitiveness lies not in the scale of funds but in the transparency of governance structure, disclosure standards, and auditing systems, establishing a replicable 'institution-grade template' for the DAT industry.

As of September 2025, SBET holds approximately 840,000 ETH, valued at around USD 3.27 billion based on the average price at quarter-end, corresponding to a market capitalization of approximately USD 2.8 billion, with mNAV ≈ 0.95×. Despite a valuation slightly below net asset value, the company achieved a quarterly EPS growth of 98%, demonstrating strong operational leverage and execution efficiency in ETH monetization and cost control.

SBET's core value does not lie in aggressive position expansion but in establishing the DAT industry's first compliant and auditable governance framework:

• Strategic advisor Joseph Lubin (co-founder of Ethereum and founder of ConsenSys) joined the company’s strategic committee in Q2, driving the integration of staking yields, DeFi derivatives, and liquidity mining strategies into the corporate treasury portfolio.
• Pantera Capital and Galaxy Digital participated in PIPE financing and secondary market shareholding, respectively, providing institutional liquidity and advisory services for on-chain asset allocation.
• Ledger Prime provides on-chain risk hedging and volatility management models.
• Grant Thornton, as the independent auditing firm, is responsible for verifying the authenticity of on-chain assets, revenue, and staking accounts.

This governance system constitutes the DAT industry's first disclosure mechanism that combines 'on-chain verifiability with traditional auditing in parallel.'

In the 10-Q report for Q3 2025, SBET made its first comprehensive public disclosure:

• The primary wallet addresses and structure of on-chain assets;
• Staking yield curves and node distribution;
• Risk limits for collateral and restaking positions.

This report makes SBET the first publicly listed company to synchronously disclose on-chain data in SEC filings, significantly enhancing institutional investor confidence and financial comparability. The market widely regards SBET as a 'compliant Ethereum index component stock': its mNAV approaches 1x, its price maintains high correlation with the Ethereum market, yet it exhibits relatively low volatility due to transparent information and robust risk structuring.

Dual Drivers of ETH Treasury: Asset-Driven and Governance-Driven Approaches

The divergent paths of BMNR and SBET form the two core pillars of the ETH DAT ecosystem's development in the third quarter of 2025:

• BMNR: Asset-driven — centered on the core logic of balance sheet expansion through financing, institutional shareholding, and capital premium. BMNR rapidly accumulates Ethereum positions using PIPE and ATM financing tools and establishes a market-based leverage channel via mNAV pricing, driving direct coupling between fiat capital and on-chain assets.
• SBET: Governance-driven – Focused on transparency, compliance, structured treasury revenue, and risk control. SBET incorporates on-chain assets into the auditing and information disclosure system, establishing the institutional boundaries of DAT through a governance framework that combines on-chain verification with traditional accounting.

These two represent the two poles of ETH's transformation from a 'reserve logic' to an 'institutionalized asset form': the former expands capital scale and market depth, while the latter establishes governance trust and institutional compliance foundations. In this process, the functional attributes of ETH DAT have surpassed 'on-chain reserve assets,' evolving into a composite structure that includes cash flow generation, liquidity pricing, and balance sheet management.

Institutional Logic of PoS Returns, Governance Rights, and Valuation Premiums

The core competitiveness of PoS crypto asset treasuries like ETH stems from the combination of interest-bearing asset structures, network-level influence, and market valuation mechanisms.

High Staking Yields: Establishment of Cash Flow Anchors

Unlike Bitcoin’s 'non-productive holdings,' ETH, as a PoS network asset, can achieve an annual yield of 3–4% through staking and form a compound return structure (Staking + LST + Restaking) in DeFi markets. This enables DAT companies to capture real on-chain cash flows in a corporate form, transforming digital assets from 'static reserves' into 'income-generating assets' with stable endogenous cash flow characteristics.

Influence and Resource Scarcity Under PoS Mechanisms

After expanding their staking scale, ETH treasury companies gain governance rights and ordering power at the network level. The combined ETH staking scale controlled by BMNR and SBET currently accounts for approximately 3.5–4% of the entire network, entering the marginal impact range of protocol governance. Such control possesses premium logic akin to 'systemic status,' with the market willing to assign valuation multiples above net asset value.

Formation Mechanism of mNAV Premium

The valuation of DAT companies not only reflects the net value of their on-chain assets (NAV) but also incorporates two types of expectations:

• Cash flow premium: Expected distributable profits driven by pledged returns and on-chain strategies;
• Structural premium: Corporate equity provides traditional institutions with a compliant channel for Ethereum (ETH) exposure, creating institutional scarcity.

At the market peak in July–August, the average mNAV of ETH DATs remained in the 1.2–1.3x range, with some companies (e.g., BMNR) briefly reaching 1.5x. This valuation logic is analogous to gold ETF premiums or the NAV discount/premium structure of closed-end funds, serving as an important 'pricing intermediary' for institutional capital entering on-chain assets.

In other words, the premium of DATs is not driven by sentiment but rather formed through a composite structure of real earnings, network power, and capital access. This also explains why ETH treasuries achieved higher capital density and trading activity within just one quarter compared to Bitcoin treasuries (MSTR model).

Structural Evolution from ETH to Multi-Altcoin Treasury Models

Entering August–September, the expansion pace of non-Ethereum DATs significantly accelerated. The new wave of institutional allocations, epitomized by Solana treasury adoption, marks a shift in market themes from 'single-asset reserves' to 'multi-chain asset stratification.' This trend indicates that the DAT model is evolving from an ETH-centric approach to multi-ecosystem replication, forming a more systematic cross-chain capital structure.

FORD: An Institutional Sample of Solana’s Treasury Model

Forward Industries (NASDAQ: FORD) has become the most representative case of this phase. In the third quarter, the company completed a $1.65 billion PIPE financing, with all proceeds allocated to building Solana spot positions and ecosystem collaboration investments. As of September 2025, FORD holds approximately 6.82 million SOL. Based on the quarter-end average price of $248–$252, its on-chain treasury net value is approximately $1.69 billion, corresponding to a market capitalization of approximately $2.09 billion and an mNAV of ≈1.24x, ranking it at the top among non-ETH treasury enterprises.

Unlike early ETH DATs, FORD's rise was not driven by a single asset but rather the result of multi-party capital and ecosystem synergy:

• The investors include Multicoin Capital, Galaxy Digital, and Jump Crypto, all of which are long-term core investment institutions within the Solana ecosystem.
• Members of the Solana Foundation Advisory Board have been incorporated into the governance structure, establishing a strategic framework of 'on-chain assets as means of production for enterprises.'
• The held SOL assets remain in a fully liquid state, with no staking or DeFi allocation yet implemented, to retain strategic flexibility for future Restaking and RWA asset integration.

This 'high liquidity + configurable treasury' model positions FORD as the capital hub within the Solana ecosystem, reflecting the market's expectation of a structural premium on high-performance public chain assets.

Structural Changes in the Global DAT Landscape

As of the end of the third quarter of 2025, the total scale of publicly disclosed non-Bitcoin DAT treasuries globally has surpassed $24 billion, marking a 65% increase from Q2. The distribution is as follows:

• Ethereum (ETH) remains dominant, accounting for approximately 52% of the total scale.
• Solana (SOL) accounts for about 25%, becoming the second-largest allocation direction for institutional funds.
• The remaining funds are mainly distributed among emerging assets such as BNB, SUI, and HYPE, forming the horizontal expansion layer of the DAT model.

The valuation anchor of ETH DAT lies in the combination of PoS yields and governance value, representing a logical blend of long-term cash flows and network control; SOL DAT, on the other hand, centers on ecosystem growth potential and staking efficiency as its core premium sources, emphasizing capital efficiency and scalability. BMNR and SBET established institutional and asset foundations during the ETH phase, while the emergence of FORD has driven the DAT model into a second phase characterized by multi-chain integration and ecosystem expansion.

Meanwhile, some new entrants have begun exploring functional extensions of DAT:

• Ethena (ENA) has introduced the StablecoinX model, which combines treasury bond yields with on-chain hedging structures to attempt the creation of a 'yield-generating stablecoin treasury,' aiming to produce reserves that are stable yet generate cash flow.
• BNB DAT is led by the exchange system, relying on asset-backed collateral from ecosystem enterprises and tokenized reserve expansion to enhance liquidity pools, forming a 'closed treasury system.'

Valuation Exhaustion Leading to Phased Stagnation and Risk Repricing

Following a concentrated upward trend in July–August, the DAT sector entered a rebalancing phase in September due to overvaluation. Secondary treasury stocks temporarily drove up overall sector premiums, pushing the median mNAV above 1.2×. However, as regulatory tightening and financing slowed, valuation support quickly receded by the end of the quarter, leading to a noticeable cooling of sector enthusiasm.

Structurally, the DAT industry is transitioning from 'asset innovation' to 'institutional integration.' The treasuries of ETH and SOL have established a 'dual-core valuation system,' but the liquidity, compliance, and real yields of expansionary assets remain in the validation stage. In other words, market drivers have shifted from 'premium expectations' to 'yield realization,' ushering the industry into a repricing cycle.

Entering September, key metrics weakened simultaneously:

• ETH staking yields have fallen from 3.8% at the start of the quarter to 3.1%, while SOL staking yields have declined by more than 25% quarter-on-quarter.
• The mNAV of several second-tier DAT companies has fallen below 1, indicating diminishing marginal capital efficiency.
• The total amount of PIPE and ATM financing fell by approximately 40% quarter-over-quarter, with institutions such as ARK, VanEck, and Pantera pausing new DAT allocations.
• At the ETF level, net inflows turned negative, with some funds replacing their ETH treasury positions with short-duration Treasury ETFs to reduce valuation volatility risks.

This pullback exposes a core issue: the capital efficiency of the DAT model has been overextended in the short term. Early valuation premiums stemmed from structural innovation and institutional scarcity, but when on-chain yields declined and financing costs rose, companies' balance sheet expansion outpaced revenue growth, leading to a 'negative dilution cycle'—where market capitalization growth relies on financing rather than cash flow.

From a macro perspective, the DAT sector is entering a 'valuation internalization phase'.

• Core companies (BMNR, SBET, FORD) maintain structural stability through robust treasuries and transparent information disclosure.
• Peripheral projects, due to their单一 capital structures and insufficient disclosures, face deleveraging and liquidity contraction.
• On the regulatory front, the SEC requires companies to disclose primary wallet addresses and staking yield standards, further compressing the space for 'high-frequency balance sheet expansion'.

Short-term risks primarily stem from valuation compression caused by liquidity reflexivity. When mNAV continues to decline and PoS yields fail to cover financing costs, market confidence in the 'on-chain reserves + equity pricing' model will be undermined, leading to systemic valuation corrections akin to those following the DeFi summer of 2021. Nevertheless, the DAT industry is not entering a recession but transitioning from a 'balance sheet expansion-driven' phase to a 'revenue-driven' phase. Over the next few quarters, Ethereum and Solana treasuries are expected to maintain institutional advantages, with their valuation cores increasingly reliant on:

• Efficiency of pledge and re-pledge returns;
• On-chain transparency and compliance disclosure standards.

In other words, the first phase of the DAT boom has ended, and the industry has entered a 'consolidation and validation period.' The key variables for future valuation normalization will depend on the stability of PoS returns, the efficiency of restaking integration, and the clarity of regulatory policies.

Prediction Markets: A 'Barometer' of Macro Narratives and the Rise of the Attention Economy

By the third quarter of 2025, prediction markets have evolved from a 'crypto-native niche activity' to become 'new market infrastructure at the intersection of on-chain and compliant finance.' Amid frequent shifts in macroeconomic policy and volatile expectations around inflation and interest rates, prediction markets are increasingly becoming essential venues for capturing market sentiment, hedging policy risks, and pricing narratives. The fusion of macro and on-chain narratives has transformed them from speculative tools into layers of the market with both information aggregation and price signaling functions.

Historically, crypto-native prediction markets have demonstrated significant foresight during multiple macroeconomic and political events. During the 2024 U.S. presidential election, Polymarket's total trading volume exceeded USD 500 million, with the single contract 'Who will win the presidential election?' reaching USD 250 million. Daily peak trading volumes surpassed USD 20 million, setting a record for on-chain prediction markets. In macro events such as 'Will the Federal Reserve cut interest rates in September 2024?', changes in contract prices notably led adjustments in expectations on CME FedWatch rate futures, indicating that prediction markets can serve as leading indicators during certain periods.

Nevertheless, the overall scale of on-chain prediction markets remains significantly smaller than their traditional counterparts. Since 2025, global crypto prediction markets (represented by platforms like Polymarket and Kalshi) have cumulatively traded approximately $24.1 billion, while traditional compliant platforms such as Betfair and Flutter Entertainment have annual trading volumes in the hundreds of billions. On-chain market sizes account for less than 5% of traditional markets but exhibit higher growth rates in user acquisition, thematic coverage, and trading activity compared to traditional financial products.

During the third quarter, Polymarket emerged as a phenomenal growth case. Contrary to rumors earlier in the year about a 'USD 1 billion valuation funding round,' the latest news in early October revealed that ICE, the parent company of the New York Stock Exchange, plans to invest up to USD 20 billion for approximately 20% ownership, valuing Polymarket at USD 8–9 billion. This signifies that its data and business model have gained recognition at the Wall Street level. As of the end of October, Polymarket’s cumulative trading volume for the year reached approximately USD 13.2 billion, with monthly trading in September hitting USD 1.4–1.5 billion, significantly higher than in Q2. Moreover, October's monthly trading volume hit a new high of USD 3 billion. Key trading themes included 'Will the Fed cut interest rates at the September FOMC meeting?', 'Will the SEC approve an Ethereum ETF by the end of the year?', 'Win probabilities in key states of the U.S. presidential election,' and 'Post-IPO stock performance of Circle (CIR).' Some researchers noted that price fluctuations in these contracts often lead U.S. Treasury yield movements and FedWatch probability curves by approximately 12–24 hours, making them forward-looking indicators of market sentiment.

Meanwhile, Kalshi achieved institutional breakthroughs in regulatory compliance. As a prediction market exchange registered with the U.S. Commodity Futures Trading Commission (CFTC), Kalshi completed a USD 185 million Series C funding round in June 2025 (led by Paradigm), valuing the company at approximately USD 2 billion. By October, its disclosed valuation had risen to USD 5 billion, with annualized trading volume growth exceeding 200%. In the third quarter, the platform launched contracts related to crypto assets, such as 'Will Bitcoin close above USD 80,000 by the end of the month?' and 'Will an Ethereum ETF be approved by the end of the year?' These developments mark the formal entry of traditional institutions into the speculative and hedging markets for 'crypto narrative-driven events.' According to Investopedia, these crypto-related contracts generated over USD 500 million in trading volume within two months of launch, providing institutional investors with a new channel to express macro expectations within a compliant framework. Thus, prediction markets have established a dual-track structure characterized by 'on-chain freedom + regulated rigor.'

Unlike earlier prediction platforms that leaned toward entertainment and political themes, mainstream market focus in the third quarter of 2025 has shifted significantly toward macroeconomic policy, financial regulation, and coin-stock linked events. Contracts related to macroeconomics and regulation on the Polymarket platform accounted for more than USD 500 million in cumulative trading volume, representing over 40% of the quarter’s total trading activity. Investors remained highly engaged with topics such as 'Will an ETH spot ETF be approved before Q4?' and 'Will Circle’s post-IPO stock price break key levels?' Price trends for these contracts sometimes even led traditional media sentiment and derivatives market expectations, gradually evolving into a 'mechanism for pricing market consensus.'

The core innovation of on-chain prediction markets lies in their ability to achieve liquidity-based event pricing through tokenization mechanisms. Each prediction event is priced in binary or continuous terms via tokens (e.g., YES/NO Tokens) and maintains liquidity through automated market makers (AMMs), enabling efficient price discovery without order matching. Settlement relies on decentralized oracles (such as UMA and Chainlink) executing on-chain, ensuring transparency and auditability. This structure allows nearly all social and financial events—from election outcomes to interest rate decisions—to be quantified and traded as on-chain assets, establishing a new paradigm for 'information financialization.'

However, alongside rapid development, risks cannot be overlooked. First, oracle risk remains a core technical bottleneck for on-chain prediction markets; any delays or manipulations of external data could lead to disputes over contract settlements. Second, the lack of clear regulatory boundaries continues to constrain market expansion, as the U.S. and the EU have yet to fully harmonize their regulatory approaches toward event-based derivatives. Third, some platforms still lack KYC/AML processes, potentially exposing them to risks related to the compliance of fund sources. Lastly, excessive liquidity concentration on leading platforms (with Polymarket accounting for over 90% of the market share) may result in price deviations and amplified market volatility during extreme conditions.

Overall, the forecast market performance in the third quarter indicates that it is no longer a marginalized "crypto play," but is becoming a significant carrier of macro narratives. It serves as both an immediate reflection of market sentiment and an intermediary tool for information aggregation and risk pricing. Looking ahead to the fourth quarter, the forecast market is expected to continue evolving along a dual-cycle structure of "on-chain × compliance": the on-chain segment, Polymarket, will achieve external expansion by leveraging DeFi liquidity and macro narrative trading; the compliant path, Kalshi, will accelerate the attraction of institutional capital through regulatory recognition and dollar-denominated mechanisms. As data-driven financial narratives become more prevalent, the forecast market is transitioning from the attention economy to decision-making infrastructure, emerging as a novel asset layer within the financial system that both reflects collective sentiment and possesses forward-looking pricing functionality.

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