On August 28, Dr. Xiao Feng, Chairman and CEO of HashKey Group, delivered a keynote speech titled (ETFs are good! DAT is better!) at Bitcoin Asia 2025, summarized from on-site shorthand with some non-essential omissions.
In recent months, many friends have asked me a question: is it more appropriate for this investment tool to take the form of an ETF or a DAT (Digital Asset Treasury)?
So my personal conclusion is that perhaps a model like DAT, just like when ETFs first came out, represents a new revolution in financial instruments.
We know that stocks transitioned from individual stocks traded on stock exchanges to the emergence of index funds, and then ETFs for index funds. The innovation of financial instruments has led to the creation of a very large new asset class. Crypto moving from On-chain to Off-chain, through the stock market, provides a method that 99% of people can easily accept, allowing all stock market investors to easily and habitually access Crypto assets. So which method is better? Is it better to use ETFs or DAT?
My personal view is that DAT may be the best way for crypto assets to move from Onchain to OffChain. We can see that so far, the only single commodity, single asset investment tool in the global capital market is the largest ETF, which is gold. There won't be a single stock ETF because stocks are already traded on stock exchanges, and you can easily buy stocks. To buy a basket of stocks, like an index fund, you need other investment tools, and Index Funds or ETFs are the most convenient tools provided for traditional investors. So before, there was only gold as a single asset ETF, and after the launch of the BTC ETF, we now have a second type of single asset ETF, which is a natural and trend-following process because everyone is used to using ETFs to create investment tools, making it easier for traditional stock market investors to invest in alternative assets, like Crypto.
However, when we value ETFs, we use net asset value; whereas for DAT, we use market value. These are completely different concepts. Market value brings greater price volatility, while net value fluctuates much less than market value. Therefore, as a single investment tool for Crypto, I believe DAT is the better option.
Better liquidity
The biggest advantage of DAT is that it has better liquidity than ETFs, which is the most concerning and core point for any investor.
My observation is that the smoothest and best way to exchange between Crypto and traditional financial assets is through trading on exchanges. The growth of ETF scale comes from subscriptions and redemptions, requiring the participation of three or even more intermediaries, taking 1-2 days to complete the settlement. Clearly, this is not as efficient as completing the conversion through trading on a distributed ledger, which may only take 2 minutes or 10 minutes. Therefore, the method of trading may be the primary way for future conversions between traditional finance and crypto assets, making better liquidity a core advantage of DAT over ETF.
Better price elasticity
At the same time, market value is more suitable for price elasticity than net value. We know that one important reason MicroStrategy can continuously establish its financing structure through various financing tools and hold a large amount of Bitcoin is the high volatility of BTC itself. Additionally, the willingness of hedge funds and other alternative investors to invest is precisely because they can own a more volatile asset through shares, allowing them to split equity and bonds in the over-the-counter market, turning volatility into another tool that both protects their price and enables arbitrage. Especially, convertible bonds (CB) are often structured into products by hedge funds or alternative investment institutions in the over-the-counter market. Therefore, these institutions prefer to invest in companies like MicroStrategy, buying its stock or convertible bonds because they can perform structured operations on them. Better price elasticity, which ETFs do not possess.
More suitable leverage ratio
Third, it has a more appropriate leverage. Previously, single asset investments only had two extremes—either holding BTC or ETH spot or buying futures or CME contracts. There is a significant gap in between, which allows listed companies to design suitable leveraged financing structures; you only need to hold the stock, and the company manages the leveraged structure, allowing you to enjoy a premium that exceeds the price growth of the cryptocurrency itself.
Built-in downside protection
Tools like DAT can bring premiums and come with downside protection. Imagine if the stock price drops below the asset's net value, it effectively offers investors a discounted opportunity to buy BTC or ETH. Such market pricing situations will quickly be smoothed out by the market, so it itself serves as a good downside protection. Otherwise, you would prefer to buy stocks, which is equivalent to buying BTC or ETH at a discount.
Considering these factors, DAT may be a more suitable financing tool for crypto assets. Just as ETFs were very suitable for index or basket stock investment strategies in the stock market back then, perhaps DAT is a new trend we will see in the next 3 to 5 years.
The scale of assets held by DAT may approach the scale currently covered by stock market ETFs, perhaps given another ten years. Therefore, I believe DAT is the most promising new investment tool for the future, more suitable for crypto assets, while ETFs may be more suitable for stock assets.
Of course, this is just my personal opinion, thank you all.
