| What to Know: – Weaker risk appetite pushed DAT inflows to lowest since October 2024. – October 10–11 liquidation shock hurt market makers, thinning order books. – Crowded trading, many DATs below NAV, limited capacity to absorb inflows. |
As reported by Cointelegraph, DAT inflows have fallen to their lowest level since October 2024. DATs are publicly traded companies that manage sizable digital‑asset treasuries. The new trough reflects weaker risk appetite after an earlier expansion in flows.
The decline accelerated after an October 10–11 liquidation shock that damaged market‑maker balance sheets and shrank order books, said Tom Lee of Fundstrat Global Advisors. Capital then pulled back, creating a feedback loop that froze buying and amplified outflows.
As reported by Stocktwits.com, trading has become crowded, with a majority of DATs now priced below net asset value while activity concentrates in a few names. That imbalance reduces the market’s capacity to absorb new inflows at scale.
Market‑maker liquidity and NAV discounts are interlinked. When market makers pull back, spreads widen and order books thin, making it harder for issuers to raise capital at or above net asset value. A discount means shares trade below the value of the underlying holdings, which typically chokes off new issuance.
“The sector is heading to a sharper differentiation where a handful of DATs will earn durable premiums while others may drift into persistent discounts,” said Matt Hougan, CIO of Bitwise. The comment underscores how liquidity and execution now drive relative valuations.
According to CryptoQuant CEO Ki Young Ju, liquidity risks are most acute in altcoin projects that lack DAT or ETF backing. Without institutional support, depth can evaporate faster during market stress.
As reported by BeInCrypto, issuing new shares while trading below NAV can destroy value by diluting holdings per share. That dynamic, combined with thinner order books, can deter fresh capital until discounts narrow and market‑making capacity normalizes.
A durable turn in inflows would likely require tighter spreads, deeper order books, and a shift from persistent discounts toward fair‑value pricing. Until those conditions improve, the setup appears bifurcated and cautious rather than broad‑based.
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