SOL Strategies CEO Says Digital Asset Treasuries Are Dying

Michael Hubbard doesn’t mince words about the future of digital asset treasuries. The SOL Strategies interim CEO believes most crypto treasury companies are built on hype rather than sustainable business models, and staking ETFs will soon make them obsolete.

“Our thesis is that there’s no sustainable market for digital asset treasuries,” Hubbard told reporters this week. “That’s not an interesting business model but a proxy financial engineering play that largely was driven by short-term hype.”

Hubbard argues that staking ETFs offer everything digital asset treasuries promised but with better regulatory frameworks, known issuers, and clearer fee structures. DATs, by contrast, often carry complex balance sheets loaded with warrant overhangs, debt converts, and unregistered shares from private placements. “The value gap that DATs are filling is narrowing very rapidly,” he said.

When digital asset treasuries first emerged, they filled a genuine need by providing exposure to crypto assets that investors couldn’t access due to geographic restrictions or regulatory barriers. That value proposition collapsed once spot Bitcoin and Ethereum ETFs launched, giving mainstream investors regulated access to the same assets without the complexity of treasury company balance sheets.

Staking ETFs adds another layer of appeal. Products like the Bitwise Solana Staking ETF, which launched in late October, let investors capture network staking rewards on top of price exposure. Bitwise’s BSOL hasn’t recorded a single day of outflows since launch, suggesting strong demand for both Solana exposure and yield-generating strategies.

“ETFs are far more regulated and have a very well-known framework and protections around that,” Hubbard explained. ETF issuers come with established track records and controlled expenses. Investors know exactly what they’re getting, which matters more as regulatory clarity improves and mainstream adoption grows.

SOL Strategies rebranded from Cypherpunk Holdings in September 2024 to focus exclusively on Solana, making it arguably the first dedicated Solana treasury firm. But Hubbard, who joined as interim CEO on September 22 after the company acquired his validator business Laine, insists SOL Strategies operates differently than pure treasury plays.

The company uses the “DAT++” label to emphasize its validator operations alongside its treasury holdings. As of its most recent business update, SOL Strategies runs validators managing over 2.8 million SOL in delegated assets, worth roughly $364 million at current prices. Those validators earn around 6.45% APY in network rewards, generating recurring revenue independent of SOL’s price movements.

The firm also holds a treasury of more than 526,000 SOL, valued at over $67 million today, placing it among the largest publicly listed Solana holders. But Hubbard wants investors to understand that the treasury is just one component, not the entire strategy.

“What we’re really trying to convey to the market right now is our focus is to capture the value of the economy, not the currency,” Hubbard said. “The currency is a piece of it. It’s a pillar of our foundation. But that’s why we have the operating business.”

Hubbard’s vision for SOL Strategies goes beyond tracking SOL’s price. He wants the company t

o function as “the Berkshire Hathaway of Solana, or the S&P 500 of Solana,” capturing value from the entire ecosystem’s growth through validator operations, potential investments, and infrastructure development.

That positioning matters more as SOL trades 56% below its January all-time high of $293. Solana dropped roughly 33% over the past month, recently trading around $127. Pure treasury companies that simply hold SOL take the full hit from price declines, with no revenue stream to offset losses.

Validator operations provide that offset. Even with SOL down significantly, the 2.8 million SOL under delegation continues generating staking rewards at network-average rates. Those rewards compound over time, and validators earn fees regardless of whether SOL trades at $127 or $293.

“We’re not tied purely to the price of SOL,” Hubbard emphasized. The statement reflects a fundamental critique of pure treasury models: they rise and fall entirely based on token prices, with no intrinsic business operations generating value when markets turn bearish.

Treasury Stocks Are Struggling

Recent market performance supports Hubbard’s skepticism about pure treasury plays. MicroStrategy (now Strategy), the largest Bitcoin treasury company, has seen its stock tumble in recent weeks despite holding over 330,000 BTC. Hut 8, a major Ethereum treasury player, has experienced similar declines.

Some DATs have started selling crypto holdings to fund stock buybacks, attempting to prop up share prices through financial engineering rather than operational growth. That behavior reinforces Hubbard’s characterization of treasuries as “proxy financial engineering plays” driven by short-term thinking.

“I think we’ll see one or two long-term sustainable or successful DATs that kind of control the narrative, that drive the theme,” Hubbard predicted. “But staking ETFs are going to eat their lunch.”

The timing of that prediction matters. Multiple Solana ETFs launched in November, including Fidelity’s FSOL, Canary Capital’s staking-enabled SOLC, and VanEck’s zero-fee VSOL. Each launch increases competitive pressure on treasury companies trying to justify premium valuations.

The Lumping Problem

Hubbard acknowledges that SOL Strategies faces a perception challenge. Despite operating validators and emphasizing infrastructure, the market still groups the company with pure Solana treasuries. “Using the DAT++ term has the negative consequence that we’re being lumped into that basket,” he said.

SOL Strategies shares trade on the Nasdaq following a cross-listing with the Canadian Securities Exchange earlier this year. Shares finished up 6% on Friday, but the stock has struggled alongside broader weakness in crypto treasury names. Getting investors to understand the validator business model versus simple token accumulation remains an ongoing challenge.

“To be clear, we think that it’s very important and valuable for us to have a treasury in Solana, because we believe in Solana, the ecosystem, and the asset,” Hubbard said. The treasury provides exposure and alignment with Solana’s success, but the validator operations provide the differentiation that Hubbard believes will matter when treasury-only models fail.

Hubbard’s prediction that only “one or two” digital asset treasuries will survive long-term suggests consolidation ahead. Strategy’s massive Bitcoin position and brand recognition give it advantages smaller treasuries can’t match. A handful of others might carve out niches, but most will either pivot to operating businesses or fade as ETFs absorb demand for simple crypto exposure.

Staking ETFs accelerate that timeline by offering both price exposure and yield without the complexity of evaluating treasury company balance sheets or worrying about warrant dilution and debt converts. For investors who simply want Solana exposure plus staking rewards, a regulated ETF from a known issuer beats a publicly traded treasury company nine times out of ten.

Whether SOL Strategies successfully positions itself as an infrastructure play rather than a treasury remains to be seen. The company needs to demonstrate that validator operations and ecosystem investments generate enough value to justify its existence beyond just holding SOL tokens. If Hubbard’s right about DATs dying, SOL Strategies better make sure it’s not grouped with the corpses.