Treasury Resilience: A Disciplined Approach

According to Deng Chao, CEO of HashKey Capital, sound governance and a disciplined approach are crucial for the survival of corporate cryptocurrency holdings.

In a discussion with Cointelegraph, Chao explained that digital asset treasuries (DATs) can be a viable, lasting solution, but only “under certain conditions.” He emphasized that DATs lacking robust risk management, proper diversification, or those treated as purely speculative ventures are susceptible to failure, particularly during market fluctuations.

“Strength is built on a foundation of discipline,” Chao stated. “The inherent nature of digital assets isn’t the issue; it’s the way they are handled that makes all the difference.”

These comments follow HashKey’s recent launch of a $500 million DAT fund in Hong Kong. The fund is specifically designed for corporate treasuries utilizing Bitcoin and Ethereum, and it will actively allocate resources to on-chain infrastructure, secure storage solutions, and services within the broader ecosystem.

The fund aims to support institutions and corporations seeking practical applications for digital assets, allowing them to not just hold digital currencies, but to gain advantages from the expansion of the underlying infrastructure, according to Chao.

Related: Bitcoin as corporate treasury: Examining why Meta, Amazon, and Microsoft passed

DATs Compared to ETFs: Distinct Purposes, Different Tools

Chao differentiated between DATs and ETFs, suggesting that they are “more complementary than competitive.” He explained that while ETFs provide simple exposure for typical investors, DATs are tailored for treasuries intending to integrate crypto into their long-term operational frameworks.

Data from SoSoValue indicates that spot Bitcoin ETFs collectively manage $152.31 billion in assets, which is about 6.63% of Bitcoin’s total market value. In contrast, public companies hold 1,111,225 Bitcoin (BTC) on their balance sheets, a total valued at $128 billion, according to BitcoinTreasuries.NET.

Chao pointed out that many corporate treasuries have faced difficulties due to inflexible fund structures or extreme market unpredictability. HashKey’s DAT structure provides flexibility through routine subscriptions and redemptions, including exposure to both BTC and ETH to mitigate the risks of concentrated holdings.

“Companies incorporating crypto into their treasuries have historically struggled with liquidity and operational challenges,” said Chao. “Our DAT fund is specifically designed to resolve these issues.”

HashKey intends to allocate funds across the Bitcoin and Ethereum (ETH) ecosystems, which Chao sees as the central pillars of both liquidity and innovation in today’s digital currency sector. Key areas of focus include secure custody solutions, payment systems, staking services, and regulated stablecoin infrastructure.

The fund’s operations are global. While initially launched in Hong Kong, Chao confirmed HashKey’s intention to expand into the US, Japan, Korea, Southeast Asia, and the UK, highlighting that “the investment approach of the fund has been global from the outset.”

Related: Institutional demand grows alongside new crypto treasuries and regulatory changes: Finance Redefined

Chao Highlights Misconceptions as Obstacles

Chao also addressed the reservations expressed by traditional financial institutions. Many significant players still view crypto as high-risk speculation, difficult to safeguard, or incompatible with conventional accounting methods. “These misconceptions aren’t simply knowledge gaps; they impede broader institutional acceptance,” he added.

Looking forward, Chao mentioned HashKey’s particularly optimistic outlook regarding the tokenization of real-world assets (RWA), institutional over-the-counter (OTC) markets, and the infrastructure supporting on-chain financial products.