Small-Cap Firms Fuel Digital-Asset Treasuries with In-Kind Crypto, Raising Retail Risks

Small-cap executives are increasingly funding digital-asset treasuries (DATs) through in-kind crypto contributions rather than cash raises, according to a new report. This shift exposes retail investors to heightened risk, as the tokens involved are often unlisted or difficult to value accurately.

Many DAT-backed stocks now trade below the value of their underlying crypto holdings, with some plummeting over 65% since inception. The trend emerged prominently in 2025, particularly among biotech and mining companies converting into crypto proxies. Sponsors either contribute tokens directly or raise funds to purchase them, creating stocks that effectively function as crypto bets.

Earlier DAT structures provided some price transparency by acquiring tokens through open markets. The current in-kind model bypasses this safeguard, allowing insiders to set valuations before public trading begins—transferring pricing risk disproportionately to retail participants.