Who are DAT companies and why do they matter?

In the current cycle, the majority of buying has not come from retail investors or even traditional funds, but from so-called DAT companies — publicly traded entities that accumulate Bitcoin and other assets on their balance sheets. The most well-known examples are MicroStrategy (MSTR), BitMine (BMNR), and several other similar players.

WE FINALLY KNOW WHY THE MARKET CRASHED ON OCTOBER 10 AND WHY IT CAN’T RECOVER
Source: X

Their model is simple and almost brutally efficient:

  1. aggressively accumulate crypto holdings,

  2. inflate their market capitalization,

  3. get included in major indices,

  4. receive constant inflows from index and passive funds,

  5. use that money… to buy even more Bitcoin.

Essentially, it’s a “fund inside a company”: you buy the stock, the money is converted into BTC on the balance sheet, the price rises, the company’s market cap grows, it enters the indices — and a self-reinforcing loop is created.

Where it broke: MSCI’s move

On October 10, MSCI — the world’s second-largest index provider — published a statement:

they are considering how to classify crypto-holding entities — as operating companies or as investment funds.

On paper it sounds technical and dry. For the market, it was a bombshell.

If MSCI decides that these structures are essentially funds rather than companies, they cannot be included in standardized passive indices. The logic is simple: to avoid a closed loop where “a fund buys an asset → grows → gets included in an index → the index buys it → it buys even more of the asset,” artificially inflating a bubble.

The key date: January 15, 2026

The final decision on classification is expected on January 15, 2026.

And this is the fork in the road:

  • if the verdict is negative, companies like MSTR will automatically be removed from certain indices;

  • this will trigger automatic mass selling by pension funds, passive strategies and traditional funds that are required to track those indices;

  • and going forward, these companies will lose the ability to enter new indices — meaning the main driver of their business model will be broken.

And on the other hand:

  • if MSCI recognizes them as full-fledged companies rather than funds, the cycle gets the green light, and the “indices → inflows → more BTC buying” machine continues to work.

Why the October 10 drop was no coincidence

DAT companies were one of the two main sources of demand in this bull cycle. And as soon as MSCI announced its intention, smart money immediately assessed the risk: if this “leg of the table” disappears, the entire structure of the current market changes.

That’s why the October 10 crash wasn’t just “someone selling the top” or another tweet-driven move. It was a reaction by capital that saw a threat to the very architecture of the cycle.

If the main persistent buyer (DAT companies via index inclusion) may lose its inflows, then expecting an aggressive V-shaped recovery no longer makes sense.

What this means for the rest of the year

For now, the market is living in limbo, waiting for the verdict.

The most likely scenario:

  • until the end of December, the market will probably remain weak, as many participants are unwilling to buy aggressively under this regulatory risk;

  • if the January 15 decision turns negative, expect a heavy dump ahead of index exclusions and forced selling by funds;

  • if the outcome is positive, nerves will settle — and today’s correction will later look like an “overheated but normal pullback” within an ongoing cycle.

This is exactly why the market has failed to “bounce properly” after the first waves of selling. This is not just another technical correction — it’s a phase where the core capital inflow mechanism of this entire cycle is in question. Until MSCI puts the final dot on the “i,” the market will be trading with one eye on the calendar, not just the chart.