Fundstrat’s Tom Lee Warns ‘Too Many DATs’ Are Chasing Too Little Trading Volume

In an interview with Rug Radio, Lee said roughly 80 DATs now exist, but about 90% trade below NAV, reflecting an overcrowded market.

• Tom Lee said investors often make the mistake of buying “cheap” DATs, even though weaker names rarely outperform in any sector.
• He noted that Strategy took the right approach by building a $1.4 billion cash reserve to weather Bitcoin drawdowns.
• Lee also forecast that Bitcoin’s halving-driven four-year cycle may be breaking, depending on whether BTC sets a new high in January.

Fundstrat’s Tom Lee reportedly said that the market for digital asset treasuries has become overcrowded, with trading activity concentrated almost entirely in two names: Strategy (MSTR) and Bitmine (BMNR). 

In an interview this week on Rug Radio, Lee said the proliferation of about 80 DATs reflects unrealistic expectations from both founders and equity investors. “For the crypto builders, they thought building a DAT was simply, let’s put together a team, put some famous names on it and we’re going 100x,” Lee said. “For the equity investor, they’re learning a lesson… you can’t necessarily outperform the crypto.”

BMNR’s stock edged 0.41% higher in midday trade on Wednesday, with retail sentiment on Stocktwits trending in ‘bullish’ territory over the past day. Meanwhile, MSTR’s stock dipped 1.2%, with retail sentiment in the ‘bearish’ zone in the last 24 hours.

Most DATs Trading Under NAV Value

Lee said roughly 90% of all DATs now trade below NAV, and most see little meaningful activity. “Between Bitmine and Strategy, that’s 92% of all trading volume,” he said. Lee added that Strategy is currently “the 17th most traded stock in the U.S.,” while Bitmine ranks around 39th. Everything else, he said, represents only a sliver of daily turnover.

Lee said investors make a mistake in treating DATs trading below NAV as bargains. In equities, he noted, sectors like biotech have long featured “net nets” and yet those names rarely outperform. “You never buy the cheapest stock in the sector. You buy the strongest,” he said. “Imagine saying, ‘I don’t want to buy Nvidia — I’ll just buy the 100th-best.’”

MSTR Did ‘The Smart Thing’

Lee said Strategy’s recent stock price volatility is largely a function of its tight correlation to Bitcoin, not its underlying business. “There’s nothing he can do, because he’s always going to be high beta to Bitcoin,” Lee said of CEO Michael Saylor. But he argued the firm is prepared for downturns.

“They have now announced a cash reserve of $1.4 billion — smart,” Lee said, adding that Fundstrat has pursued a similar approach. “We’ve been running cash the entire time… we don’t want anyone to ever think we’re not going to be around.”

Lee said Bitmine remains structurally stronger than peers because of its ETH treasury. The firm holds roughly 3.7 million ETH, far more than all other DATs combined. “The rest… don’t even own a million,” he said. That position, and its staking yield, create what Lee views as a significant strategic moat. “I don’t think Bitmine would ever sell its E,” he said. “There’s no reason to be selling.”

Bitcoin No Longer Following Four-Year Cycle

Lee also questioned whether Bitcoin continues to adhere to the four-year halving cycle long cited by market veterans. With long-term holders selling heavily this year, he said, historical patterns may no longer apply.

“If Bitcoin makes a new high in January, there’s no four-year cycle,” he said. The cycle “was true in the past — until this cycle.” He noted that other markets once governed by reliable timing patterns, such as ISM manufacturing data, copper, and gold, have also broken away from old rhythms.

“We’ll know by January 31,” he said. “If Bitcoin closes above 126,000 – there’s no four-year cycle.”

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