On August 28th, Dr. Xiao Feng, Chairman and CEO of HashKey Group, delivered a keynote speech titled "ETFs Are Good! DATs Are Better!" at Bitcoin Asia 2025. The following text is compiled from on-site transcripts and has undergone some edits that do not affect the original meaning.

In recent months, many friends have asked me the same question: as Bitcoin moves from on-chain transactions to off-chain stock exchanges, becoming a very popular investment tool in stock trading, which form is more suitable for such a tool—an ETF or a DAT (Digital Asset Treasury)?

My personal conclusion is that the DAT model might be a revolution in financial tools, much like when ETFs first emerged.

We know that stocks evolved from trading individual stocks on exchanges to the emergence of index funds, and later, ETFs based on those index funds. Innovations in financial instruments have consistently led to the creation of very large new asset classes. Crypto is moving from on-chain to off-chain, entering the stock market in a way that is currently easily accepted by 99% of people, allowing all stock market investors to easily and habitually gain exposure to crypto assets. So, which method is better? Is the ETF method better, or is the DAT better?

My personal view is that DAT might be the best way for crypto assets to move from on-chain to off-chain. We can see that, so far, the largest ETF for a single commodity or single asset in the global capital markets is gold. There are no single-stock ETFs because stocks are already traded on stock exchanges, and you can easily buy them. If you want to buy a basket of stocks, like an index fund, you need other investment tools. Index funds or ETFs provide the most convenient tools for traditional investors. So, before, the only single-asset ETF was for gold. After the launch of the BTC ETF, we now have a second single-asset ETF. This is a natural,顺势而为 (shùn shì ér wéi - go with the flow) process because people are accustomed to using ETFs to create investment tools, making it easier for traditional stock market investors to invest in alternative assets like crypto.

However, when we value an ETF, we use the Net Asset Value (NAV); whereas for a DAT, we use the Market Value. These are two completely different concepts. Market value leads to greater price volatility, while the fluctuation of NAV is much smaller than that of market value. Therefore, as a single investment tool for crypto, I believe DAT is the better approach.

Better Liquidity

The greatest advantage of DAT is that it offers better liquidity than ETFs, which is the most concerning and core point for any investor.

My observation is that the smoothest and best way to exchange between crypto and traditional financial assets is through trading on exchanges. The growth in ETF scale comes from subscriptions and redemptions, which require the involvement of three or even more intermediaries and take 1-2 days to settle. This is clearly inferior to completing the conversion via trades on a distributed ledger, which might take only 2 or 10 minutes. Therefore, trading is likely to be the primary method for converting between traditional finance and crypto assets in the future. Thus, better liquidity is a core advantage of DAT over ETF.

Better Price Elasticity

At the same time, market value provides more appropriate price elasticity than net asset value. We know that a key reason MicroStrategy can continuously build its financing structure through various financing tools and hold a large amount of Bitcoin is the significant volatility of BTC itself. Furthermore, the reason hedge funds and other alternative investors are willing to invest is precisely because they can own a more volatile asset through shares, allowing them to split equity and bonds off-exchange, turning volatility into another tool for both price protection and arbitrage. Particularly with convertible bonds (CBs), hedge funds or alternative investment institutions often repackage them into structured products off-exchange, breaking them apart. So, these institutions like to invest in companies like MicroStrategy, buying their stocks or convertible bonds, because they can perform structured operations on them. Better price elasticity is something ETFs do not possess.

More Suitable Leverage

Third, it offers more suitable leverage. Originally, single-asset investment had only two extremes—either holding BTC or ETH spot, or buying futures or CME contracts. There was a significant gap in between. It is this gap that allows listed companies to design suitable leveraged financing structures. You only need to hold the stock, and the company manages the leveraged structure itself, allowing you to enjoy a premium higher than the price appreciation of the cryptocurrency itself.

Built-in Downside Protection

DAT-type tools can bring a premium and come with built-in downside protection. Imagine if the stock price falls below the net asset value; it essentially offers investors an opportunity to buy BTC or ETH at a discount. This market price situation would quickly be arbitraged away by the market, so it inherently provides good downside protection. Otherwise, you might prefer to buy the stock, equivalent to buying BTC or ETH at a discount.

Considering all these factors, DAT might be a more suitable financing tool for crypto assets. Just like how ETFs were very suitable for index or basket investment strategies in the stock market back in the day, DAT might be the new trend we will see in the next 3 to 5 years.

The scale of assets held by DATs might approach the scale covered by current stock market ETFs, perhaps given another ten years. Therefore, I believe DAT is the most growth-oriented new investment tool for the future. It is more suitable for crypto assets, while ETFs might be more suitable for stock assets.

Of course, this is just my personal opinion. Thank you.