Xiao Feng's Full Speech at Bitcoin Asia 2025: "ETFs Are Good! DATs Are Better!"
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Xiao Feng's Full Speech at Bitcoin Asia 2025: "ETFs Are Good! DATs Are Better!"
DAT is a highly promising new investment instrument for the future, better suited for crypto assets, while ETFs may be more suitable for stock assets.
Navigating Web3 tides with focused insightsOn August 28, Dr. Xiao Feng, Chairman and CEO of HashKey Group, delivered a keynote speech titled "ETFs Are Good! But DATs Are Better!" at Bitcoin Asia 2025. The text is transcribed from live notes with minor edits that do not affect the original meaning.
In recent months, many friends have asked me one question: from on-chain Bitcoin transactions to off-chain stock exchanges, becoming a popular investment vehicle in the stock market—would this type of investment tool be better structured as an ETF or as a DAT (Digital Asset Treasury)?
In my personal view, perhaps the DAT model represents a new revolution in financial instruments, much like when ETFs first emerged.
We know that equities evolved from individual stocks trading on exchanges to index funds, and later to ETFs for index funds. Each innovation in financial tools has unlocked significant new asset classes. Crypto is moving from on-chain to off-chain through the stock market—an approach easily accepted by 99% of people—allowing all stock market investors to access crypto assets effortlessly and habitually. So which method is better? Is it ETFs or DATs?
My personal opinion is: DAT may be the best way for crypto assets to transition from on-chain to off-chain. To date, the only single commodity or single asset investment product in global capital markets with massive scale is gold via ETFs. There are no ETFs for individual stocks because stocks already trade directly on exchanges—you can buy them easily. When you want to buy a basket of stocks, such as an index fund, then other tools become necessary. Index funds or ETFs are thus the most convenient tools provided for traditional investors. Until now, gold was the only single-asset ETF. With the launch of BTC ETFs, we now have a second single-asset ETF—a natural and timely development, since people are accustomed to using ETFs to create investment vehicles that allow traditional stock investors easier access to alternative assets like crypto.
However, when valuing ETFs, we use Net Asset Value (NAV), whereas for DATs, we use Market Value. These are entirely different concepts. Market value brings greater price volatility; NAV fluctuates far less than market value. Therefore, as a single-asset investment tool for crypto, I believe DAT is the superior choice.
Better Liquidity
The biggest advantage of DATs is superior liquidity compared to ETFs—this is the most critical concern for any investor.
From my observation, the smoothest and most efficient way to convert between crypto and traditional financial assets is through exchange trading. ETF growth depends on creation and redemption processes involving three or more intermediaries and taking 1–2 days to settle. This clearly cannot match the speed of on-ledger transfers via trading, which could take just 2 or 10 minutes. Thus, trading will likely become the primary method for converting between traditional finance and crypto assets. Better liquidity is therefore a core advantage of DATs over ETFs.
Better Price Elasticity
Additionally, market value offers more suitable price elasticity than NAV. We know that a key reason MicroStrategy can continuously build its financing structure using various funding tools to accumulate large amounts of Bitcoin is due to BTC’s inherent high volatility. Likewise, hedge funds and alternative investors are willing to invest precisely because they can hold shares in an asset with higher volatility, allowing them to separate equity and debt off-exchange, turning volatility into another instrument—both protecting their positions and enabling arbitrage. Especially convertible bonds (CBs), often repackaged by hedge funds or alternative investment firms off-exchange into structured products, can be unbundled. That’s why institutions love investing in companies like MicroStrategy—buying their stocks or convertible bonds—because they enable structured operations. This enhanced price elasticity is something ETFs lack.
More Appropriate Leverage
Third, it enables more appropriate leverage. Previously, single-asset investments had only two extremes—either holding spot BTC or ETH, or buying futures or CME contracts. A significant gap exists in between. This gap allows listed companies to design optimal leveraged financing structures. Investors need only hold the stock while the company manages the leveraged setup, enabling investors to enjoy a premium exceeding the underlying crypto asset’s price appreciation.
Inherent Downside Protection
DAT-type instruments can generate premiums and come with built-in downside protection. Imagine if a stock price falls below its net asset value—it effectively gives investors a discounted opportunity to buy BTC or ETH. Such market mispricing tends to correct itself quickly, making it inherently a strong downside safeguard. Otherwise, investors would simply prefer buying the stock, which amounts to acquiring BTC or ETH at a discount.
Taking all these factors together, DAT may be a more suitable financing vehicle for crypto assets. Just as ETFs were perfectly suited for index or basket-of-stocks investment strategies in the stock market, DAT may be the emerging trend we’ll see over the next three to five years.
The asset scale held by DATs may approach the size currently covered by ETFs in the stock market—perhaps within ten years. I believe DAT is the most promising and high-growth investment tool of the future, better suited for crypto assets, while ETFs may remain more appropriate for traditional equities.
Of course, these are just my personal views. Thank you all.
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