Crypto Treasuries Are Vanishing – And ETF Betting Will ‘Eat Their Lunch’: CEO of SOL Strategies

Canada-based SOL Strategies is a publicly traded company Solana-centric company that has been storing the network’s native token, but doesn’t want to be confused with the growing list of digital asset treasuries (or DATs) that have focused solely on collecting SOL, the network’s native token.

“Our position is that there is no sustainable market for digital asset government bonds,” said Michael Hubbard, interim CEO of SOL Strategies. Declutter. “That’s not an interesting business model.”

“It’s a proxy financial technique that was largely driven by short-term hype. I’d almost say greed, but that seems a bit strong,” he added. “I think we’ll see one or two long-term sustainable or successful DATs that control the narrative, that drive the theme, but striking ETFs will eat their lunch.”

Hubbard said that while the original DAT thesis about providing exposure to previously uninvestable assets – based on geography or other constraints – was a great thesis, it has lost its luster.

“Now we have ETFs that provide the same level of exposure, but ETFs are much more regulated and have a very well-known framework and protection around them,” he added.

ETFs also come from well-known issuers with controlled and defined expenses, he added, while DATs can have complex balance sheets, overhanging warrants, debt conversions and shares in private placements that have not yet been registered for resale.

“The value gap that DATs are filling is closing very quickly,” Hubbard said.

Staking ETFs add another benefit for investors by giving them a share of the network staking rewards for proof-of-stake assets like Solana and Ethereum. The newly launched Bitwise Solana Staking ETF has seen zero days of outflows since its launch in late October, indicating solid demand for both Solana and staking-enhanced funds.

SOL Strategies was perhaps the first Solana treasury company to change its name Cypherpunk companies in September 2024 to focus on the growing layer 1 network and its underlying token, SOL.

But the company claims it’s more than a DAT adopt the name DAT++ that gives credibility to the brand’s validator activities.

Hubbard, who took over as interim CEO September with the departure of Leah Waldis aimed at ensuring that shareholders and potential investors are aware of this.

“What we’re really trying to convey to the market right now is that our focus is on capturing the value of the economy, not the currency,” Hubbard said, speaking about the company’s focus on growing the Solana network and activity, versus just the price of the token.

“The coin [SOL] is a piece of it. It’s a pillar of our foundation,” he added. “But that’s why we have the operations.”

The company’s validator business had over 2.8 million SOL or approximately $364 million in assets under delegation since its inception. most recently published company updatewhich gives a network average of approximately 6.45% APY in rewards on that delegated stake.

It also manages a treasury of digital assets worth over 526,000 SOL or over $67 million at current prices, making it among the top listed holders of Solana.

“Using the DAT++ term has the negative effect of putting us in that basket,” says Hubbard of the growing list of Solana Treasury companies. “And to be clear, we think it is very important and valuable for us to have a treasury in Solana because we believe in Solana, the ecosystem and the asset.”

But the company’s interim CEO, who joined in March when it acquired its validator company Laine, wants to continue pushing the narrative that SOL Strategies is not purely focused on the value of the SOL token, but instead wants to be the company that captures the value of the entire Solana economy.

“If we had to, I’d say we become Solana’s Berkshire Hathaway, or Solana’s S&P 500,” he said when asked what success looks like for the company. “We would only accelerate the ecosystem through our involvement, but at the same time we would also capture the value of that entire growth – and we are not purely tied to the price of SOL.”

Hubbard’s comments come as the digital asset treasury continues to show signs of weakness this year. Top companies like Bitcoin giant Strategy and leading Ethereum treasury BitMine have seen them stock prices plummet in recent weeks, while some DATS have been started sell their crypto holdings in an attempt to maintain their stock prices by buying back shares.

Shares of SOL Strategies rose 6% on Friday. The company’s shares began trading on the Nasdaq earlier this summer as part of its cross-listing on the Canadian Securities Exchange.

Solana is down about 33% over the past month, recently trading around $127 and down more than 56% from January’s all-time high of $293.