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Tom Lee, chair of BitMine Immersion Technologies Inc. (AMEX:BMNR), has sounded the alarm on digital asset treasuries, warning that the sector is "running out of steam" as valuations collapse.
Speaking on Fortune's Crypto Playbook podcast, Lee argued that the digital asset treasury, or DAT, trend that defined the past two years has run out of momentum.
These companies, structured as public vehicles holding vast cryptocurrency reserves, have drawn comparisons to Strategy Inc. (NASDAQ:MSTR), which pioneered the approach in 2020 by accumulating Bitcoin (CRYPTO: BTC) as a corporate reserve.
"Many of these firms are now trading below their underlying asset value," Lee said, suggesting investors no longer view DATs as efficient exposure vehicles.
"If that's not already a bubble burst, what is?" he added.
Lee's company, BitMine, has sought to replicate Strategy's model with Ethereum (CRYPTO: ETH) instead of Bitcoin.
The firm, which rebranded from a mining company earlier this year, holds more than three million ETH—roughly 2.5% of the total supply and carries a market capitalization above $15 billion.
Lee said BitMine's goal is to expand its holdings to 5% of Ethereum's supply, positioning it as a "liaison between Wall Street and blockchain innovation."
He added that Ethereum remains "the blockchain of Wall Street," citing its growing role in tokenized assets and stablecoin settlement systems.
While BitMine's accumulation strategy mirrors Michael Saylor's Bitcoin playbook, the broader DAT sector faces mounting skepticism.
Analysts note that newer entrants focused on smaller altcoins, such as Worldcoin (CRYPTO: WLD), have diluted market confidence.
Several DATs now trade below the value of their crypto holdings, reflecting thin liquidity and waning institutional demand.
Lee acknowledged the risks, saying that "just holding crypto on a balance sheet doesn't guarantee long-term performance."
Digital asset treasuries once promised a new way for companies to gain crypto exposure.
Today, many trade below the value of their holdings.
That shift questions whether balance-sheet crypto is innovation or a fading strategy.
For BitMine and Strategy, the market no longer pays a premium.
The decline signals that ETFs, staking, and sovereign funds may now control the institutional path into crypto.
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