Times are definitely not looking good for Digital Asset Treasuries (DATs), which were very popular at the beginning of the year. This situation has just prompted the founder of the Huobi exchange to abandon his $1 billion Ethereum-based project.
A $1 billion Ethereum DAT throws in the towel
The rapid and unprecedented rise of Digital Asset Treasuries (DATs) in the first few months of the year clearly benefited the cryptocurrency market, with massive and recurring purchases estimated in the billions of dollars.
This surge is now mirrored by the current collapse of this fledgling sector, with publicly traded companies selling off crypto assets held in their treasuries to buy back their own shares, while leading investors are reducing their initial exposure.
This difficult observation was clearly made by Li Lin, founder of the Huobi cryptocurrency exchange platform, who was behind an ambitious Ethereum Treasury project estimated at $1 billion, announced on October 20.
Indeed, recent information shared by the X Wu Blockchain account indicates that this Digital Asset Treasury has been put on hold before it even really existed, involving a straightforward repayment of the funds committed by its main investors, Shen Bo (co-founder of Fenbushi Capital), Xiao Feng (CEO of HashKey Group), and Cai Wensheng (founder of Meitu).
Exclusive: The $1 billion Ethereum DAT proposed by leading Asian crypto investors has been put on hold, and the capital committed is to be returned. Several authoritative sources have confirmed this development.
Wu Blockchain
A knockout following the October 11 crash
In fact, it would appear that this abandonment is a direct consequence of the repercussions caused by the crypto market crash on October 11. This reversal is considered unfavorable for the implementation of this DAT, particularly with Ether (ETH) returning to the $3,000 level in recent days.
It must be said that the only other Ethereum cash cow of this magnitude, Bitmine, is currently facing difficult headwinds, to the point that billionaire Peter Thiel reduced his stake in the company by half earlier this week.
At the same time, its president and Wall Street veteran, Tom Lee, is trying to sell a yet-to-come “Wall Street ETH supercycle powered by blockchain,” which one wonders if it is not just an attempt to reassure his shareholders.
In any case, this premature abortion of a promised $1 billion Ethereum treasury deals another blow to the digital asset treasury sector. And it’s safe to say that the worst may still be to come, given the poor performance of the crypto market.
