SOL Strategies CEO Declares Crypto Treasuries Unsustainable, Touts Staking ETFs as Successor

Introduction: A New Vision for Solana Investment

In a bold declaration that challenges a foundational trend in digital asset investment, Michael Hubbard, Interim CEO of Canadian-based SOL Strategies, has pronounced the business model of Digital Asset Treasuries (DATs) unsustainable. Speaking to Decrypt, Hubbard positioned his own company—a significant, publicly-listed holder of Solana (SOL)—not as a mere treasury, but as a more sophisticated entity focused on capturing value from the entire Solana economy. His critique arrives at a precarious time for DATs, with market leaders seeing stock prices tumble and some beginning to liquidate their crypto holdings. In contrast, Hubbard champions the rise of Staking ETFs, pointing to products like the Bitwise Solana Staking ETF and its record of zero outflows since launch as evidence of a superior, regulated investment vehicle poised to dominate the landscape.

The Unsustainable DAT Model: A Thesis Past Its Prime

“Our thesis is that there's no sustainable market for digital asset treasuries,” Hubbard stated unequivocally. “That's not an interesting business model.” This stark assessment comes from the head of a company that itself manages a digital asset treasury of more than 526,000 SOL, valued at over $67 million, placing it among the top publicly listed holders of the token. Hubbard’s argument is not against holding SOL, but against building a business solely around its accumulation.

He described the DAT phenomenon as “a proxy financial engineering play that largely was driven by short-term hype. I almost want to say greed, but that seems a bit strong.” He acknowledged that the original DAT thesis was compelling: providing exposure to assets like Solana that were previously uninvestable for many due to geographical or regulatory restrictions. However, Hubbard contends that this value proposition is evaporating. “The value gap that DATs are filling is narrowing very rapidly,” he said.

Staking ETFs: The Regulated Successor Eating DATs' Lunch

Hubbard identifies Staking Exchange-Traded Funds (ETFs) as the direct and formidable successor to the DAT model. “Now we have ETFs that provide the same level of exposure, but ETFs are far more regulated and have a very known framework and protections around that,” he explained. This regulatory clarity is a significant advantage in an industry often plagued by uncertainty.

Furthermore, ETFs come from known issuers with controlled and defined expenses. This stands in sharp contrast to DATs, which Hubbard notes “can have complex balance sheets, warrant overhangs, debt converts, and shares in private placements that haven’t yet been registered for resale.” For the average investor seeking pure exposure, the simplicity and safety of an ETF are increasingly attractive. The recent performance of the Bitwise Solana Staking ETF, which has seen zero days of outflows since its launch in late October, provides tangible evidence of solid demand for this new breed of fund. These products add a further critical benefit: they allow investors to earn a share of network staking rewards from proof-of-stake assets like Solana and Ethereum.

SOL Strategies: More Than a Treasury, Aspiring to Be the "Berkshire Hathaway of Solana"

SOL Strategies was arguably the first Solana treasury firm, rebranding from Cypherpunk Holdings in September 2024 to commit to a focus on the layer-1 network. Despite this heritage, the company vehemently resists the DAT label, instead adopting the “DAT++” moniker to signify its additional operational layer. “Using the DAT++ term has the negative consequence that we're being lumped into that basket,” Hubbard lamented, referring to the growing list of Solana treasury firms.

The core differentiator is SOL Strategies’ active validator business, acquired when Hubbard joined the company in March with his firm, Laine. “What we're really trying to convey to the market right now is our focus is to capture the value of the economy, not the currency,” Hubbard stated. The currency, SOL, remains “a pillar of our foundation,” but the operating business is what sets them apart.

As of its most recently published business update, the firm's validator operations had more than 2.8 million SOL (approximately $364 million) in assets under delegation, earning a network average of around 6.45% APY in staking rewards. This revenue-generating operation is central to Hubbard’s vision. When asked what success looks like for SOL Strategies, he responded: “If I had to, I would say we become like the Berkshire Hathaway of Solana, or the S&P 500 of Solana… We would be just accelerating the ecosystem through our involvement, but at the same time also capturing the value of that entire growth—and we're not tied purely to the price of SOL.”

Market Context: DAT Weakness and SOL's Volatility

Hubbard’s comments are not made in a vacuum; they coincide with visible strain in the digital asset treasury sector. The news summary notes that top firms like Bitcoin giant Strategy and leading Ethereum treasury BitMine have seen their stock prices tumble in recent weeks. Some DATs have resorted to selling their crypto holdings to fund stock buybacks in an attempt to stabilize their share prices—a move that underscores the very pressures Hubbard describes.

Simultaneously, the underlying asset itself has experienced significant volatility. At the time of the report, Solana was trading around $127, down approximately 33% over the previous month and more than 56% off its January all-time high of $293. This price action highlights one of the core vulnerabilities of a pure-treasury model: its fate is intrinsically and solely linked to the often-volatile price of its held asset. In this challenging environment, shares of SOL Strategies finished up 6% on the Friday the report was published, following its cross-listing on the Nasdaq earlier in the summer.

Strategic Conclusion: Navigating the Evolution of Crypto Investment

The critique from SOL Strategies’ CEO marks a pivotal moment in the maturation of crypto investment vehicles. The initial wave of Digital Asset Treasuries served a vital purpose by creating accessible on-ramps for institutional and public market exposure. However, as Michael Hubbard argues, their raison d'être is being systematically eroded by more efficient, regulated, and feature-rich products like Staking ETFs.

For investors and market watchers, this signals a clear industry evolution. The future appears to belong not to passive holding companies, but to active ecosystem participants and highly liquid, regulated funds. SOL Strategies’ pivot towards becoming an economic accelerator within the Solana network—complete with a substantial validator business—provides a concrete blueprint for how former "treasuries" can adapt.

Readers should watch two key areas closely in the coming months: first, the continued flow data for staking ETFs like Bitwise’s product will be a critical barometer of investor preference. Second, the financial performance and strategic maneuvers of traditional DATs will reveal whether they can pivot or if consolidation is inevitable. As regulatory frameworks solidify and market sophistication grows, capturing the value of an ecosystem’s growth is proving to be a far more compelling—and potentially sustainable—narrative than simply betting on its currency.