Xiao Feng's Full Speech at Bitcoin Asia 2025: DAT is More Suitable for Crypto Assets than ETF
DAT may be the best way for crypto assets to move from Onchain to OffChain.
Original compilation: TechFlow by Deep Tide
On August 28, Dr. Xiao Feng, Chairman and CEO of HashKey Group, delivered a keynote speech titled "ETF is Good! DAT is Better!" at Bitcoin Asia 2025. The following is organized from the live transcription, with some minor edits that do not affect the original meaning.
In recent months, many friends have asked me a question: from on-chain bitcoin trading to off-chain stock exchanges, bitcoin has become a very popular investment tool in stock trading. So, is it more appropriate for such an investment tool to take the form of an ETF, or a DAT (Digital Asset Treasury)?
My personal conclusion is that perhaps the DAT model, just like when ETFs first emerged, represents a new revolution in financial instruments.
We know that stocks started with individual stocks being traded on stock exchanges, then index funds appeared, and after that, index fund ETFs emerged. Every innovation in financial instruments has brought about a significant new asset class. Crypto has moved from on-chain to off-chain, entering the stock market in a way that 99% of people are familiar with, allowing all stock market investors to easily and habitually access crypto assets. So, which way is better? Is the ETF approach better, or is DAT better?
My personal view is: DAT may be the best way for crypto assets to move from on-chain to off-chain. So far, the only single commodity or single asset investment tool in the global capital market with the largest ETF is gold. There is no single-stock ETF for stocks because stocks are already traded on stock exchanges, and you can easily buy them. If you want to buy a basket of stocks, such as an index fund, you need other investment tools. Index funds or ETFs are the most convenient tools for traditional investors. So, before single-asset ETFs, there was only gold. After the launch of the BTC ETF, we now have a second single-asset ETF. This is a natural and logical process, as people are 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 valuing ETFs, we use Net Asset Value (NAV); for DAT, we use Market Value. These are two completely different concepts. Market value brings greater price volatility, while NAV fluctuates much less. Therefore, as a single investment tool for crypto, I believe DAT is a better approach.
Better Liquidity
The biggest advantage of DAT is that it has better liquidity than ETFs, which is the most important and core concern for any investor.
My observation is that the smoothest and best way to exchange between crypto and traditional financial assets is through exchanges. The growth in ETF scale comes from subscriptions and redemptions, which require the participation of three or even more intermediaries, taking 1-2 days to complete settlement. Clearly, it is not as efficient as making conversions via trading on a distributed ledger, which may only take 2 or 10 minutes. Therefore, trading may become the main way to convert between traditional finance and crypto assets in the future, so better liquidity is a core advantage of DAT over ETFs.
Better Price Elasticity
At the same time, market value offers more appropriate price elasticity than NAV. We know that MicroStrategy has been able to continuously build its financing structure through various financing tools and hold a large amount of bitcoin, largely because BTC itself is highly volatile. Also, the reason why hedge funds and other alternative investors are willing to invest is precisely because they can own a more volatile asset through shares, split equity and bonds off-market, and turn volatility into another tool to both protect their own prices and arbitrage. Especially convertible bonds (CB), which are often structured into products by hedge funds or alternative investment institutions off-market. That's why these institutions like to invest in companies like MicroStrategy, buying their stocks or convertible bonds, because they can perform structured operations on them. Better price elasticity is something ETFs do not have.
More Appropriate Leverage Ratio
Third, it offers more appropriate leverage. Previously, single-asset investment only had two extremes—either holding BTC or ETH spot, or buying futures or CME contracts. There was a huge gap in between, and this gap allows listed companies to design suitable leveraged financing structures. You only need to hold the stock, and the company manages the leveraged structure itself, allowing you to enjoy a higher premium than the price growth of the crypto itself.
Built-in Downside Protection
DAT-type tools can bring a premium and also come with built-in downside protection. Imagine if the stock price drops below the net asset value, it is equivalent to providing investors with a discounted opportunity to buy BTC or ETH. Such market price situations will be quickly arbitraged away, so it is inherently a good downside protection. Otherwise, you would rather buy the stock, which is equivalent to buying BTC or ETH at a discount.
Considering all 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 in the day, perhaps DAT is the 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.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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