Bitcoin Drops Below $85K Amid DATs Facing mNAV Volatility: Finance Redefined

In the latest cryptocurrency market update, Bitcoin has witnessed a significant downturn as the holiday season approaches, leading to reduced investor activity.

Key Takeaways

Bitcoin fell over 5% last week, hitting a low of $84,398 before rebounding to around $87,769.
Digital Asset Treasury (DAT) companies are struggling with volatile market conditions that impact their sustainability.
The US SEC closed its four-year investigation into Aave, allowing the platform's founder to outline ambitious plans for 2026.
A new governance proposal aims to make $1 billion in the Hyperliquid Assistance Fund inaccessible permanently.
Ethereum blockspace trading platform ETHGas raised $12 million to promote a revised system for blockspace allocation.

Bitcoin dips below $85K as DATs face ‘mNAV rollercoaster’: Finance Redefined

Bitcoin's Recent Market Performance

Bitcoin has experienced a downturn, declining more than 5% over the past week, falling to a low of $84,398 on Thursday. However, it managed to bounce back, trading above $87,769 on Friday, according to TradingView data.

The cryptocurrency market's volatility poses a challenge for Digital Asset Treasury (DAT) companies. According to Marco Santori, CEO of Solmate, the long-term viability of these companies hinges on their ability to navigate the “mNAV roller coaster.” This term reflects the fluctuations in the value of the tokens held by these firms on their balance sheets.

Navigating the mNAV Dilemma

The growth of DAT companies is a prominent trend in 2025, yet their survival depends on effective capital management and sound business practices. Marco Santori shared insights on the challenges faced by DATs, particularly concerning the market-to-net-asset value (mNAV) dynamic.

“DATs rely on having a higher mNAV, indicating their market capitalization exceeds the value of their asset holdings,” Santori explained during Cointelegraph's Chain Reaction X show. However, a decline in interest for the underlying tokens can significantly reduce mNAV, leaving these treasury companies struggling to grow strategically.

“I wanted to ensure our investors don’t experience that volatility,” Santori added, emphasizing the need for strategies that minimize exposure to the mNAV fluctuations.

Aave's Ambitious Master Plan for 2026

Following the conclusion of the SEC's investigation, Aave's founder, Stani Kulechov, revealed a bold vision for the decentralized finance platform for 2026. Despite Aave's successes in 2025, Kulechov stated that the true potential of the protocol is only just beginning.

In his post on X, Kulechov highlighted the plan, which focuses on key areas including Aave v4, Horizon, and the Aave App, with a target to achieve $1 billion in real-world asset (RWA) deposits.

Aave v4 promises significant improvements, enhancing functionalities in borrowing and lending, optimizing the user interface, and refining liquidation parameters. Kulechov emphasized that this version will be central to the future of finance, with features designed for maximizing liquidity and functionality.

Hyperliquid Proposes Vote on $1 Billion Assistance Fund

In a notable governance move, the Hyper Foundation has proposed a validator vote to declare certain HYPE tokens within the protocol's Assistance Fund as permanently inaccessible. This decision affects nearly $1 billion in tokens, which would be treated as "burned."

This initiative is part of a broader mechanism that converts trading fees into HYPE tokens, although the funds are currently located in a system address designed without access controls. By voting "Yes," validators can agree to this permanent exclusion, thus solidifying the status of the Assistance Fund's assets.

ETHGas Raises Funding Amid Future Prospects

ETHGas, a trading platform for Ethereum blockspace, has successfully raised $12 million in its seed round, spearheaded by Polychain Capital. This funding aligns with discussions from Ethereum co-founder Vitalik Buterin regarding the potential for an onchain gas futures market, which could help users better understand and manage transaction fees.

ETHGas highlights the need for innovative approaches to blockspace allocation, asserting that their platform represents a significant step in that direction with substantial commitments from various stakeholders.

Vitalik Buterin _ETHGas' Ethereum blockspace trading platform. Source:_ETHGas

Regulatory Clarity for Tokenized Stocks

The US SEC's Trading and Markets Division has issued guidance regarding the custody of tokenized stocks and bonds, integrating them into existing regulations rather than establishing them as a new asset class. This clarification allows broker-dealers to operate under standard customer protection rules, providing a framework for the integration of blockchain-based securities into the traditional market structure.

US SEC _Source:_US SEC

DeFi Market Overview

Recent data from Cointelegraph Markets Pro and TradingView indicates that a majority of the top 100 cryptocurrencies have closed the week on a downward note. Among the largest declines, the memecoin Pump.fun’s token dropped 32%, with the decentralized exchange Aster’s token following suit, down over 27%.

Total value locked in DeFi. Source: DefiLlama

Thank you for reading our recap of this week's most important developments in decentralized finance. Join us next Friday for more updates, insights, and educational content in this rapidly evolving field.