Behind the DAT craze, why are Princeton alumni always in the spotlight?

Source: Bloomberg

Translation: Zhou, ChainCatcher

Original Title: Bloomberg: "The Princeton Mafia" Is Fueling the Crypto Treasury Craze

Influential figures in the crypto world, including Mike Novogratz of Galaxy Digital and Dan Morehead of Pantera Capital, have repeatedly appeared in deal after deal, shaping one of the boldest bets of the new crypto era: the digital asset treasury craze.

These publicly listed companies (about 85 this year and still increasing) have raised billions of dollars from investors ranging from the US and Gulf countries to Asia. Their strategy is to use Wall Street tactics to raise funds, hoard crypto assets, and then repeat the process. Week after week, many of the same names keep appearing in the industry's boldest deals.

Novogratz, Morehead, and Joe Lubin (Ethereum co-founder) are classmates and long-time friends from Princeton. They are not just veterans of the crypto industry, but also central figures in this high-stakes digital asset push, coinciding with a broader treasury wave that is beginning to show signs of wavering—their bonds trace back to their undergraduate days at Princeton in the 1980s.

Back then, Novogratz and Lubin were college roommates—Novogratz was a wrestler from the East Coast; Lubin was a squash player skilled in computer science. Morehead was an engineering student who played football and lived nearby. These bonds have shaped decades of crypto deal-making.

While tight-knit networks are common in traditional finance, the crypto industry is built on promises of decentralization and anonymity. Yet these familiar faces tell a different story, a dynamic that led Fortune magazine to jokingly call them the "Princeton Mafia."

Novogratz leads Galaxy, a digital asset financial services giant; Morehead is CEO of Pantera Capital, one of the earliest crypto investment firms; Lubin is a co-founder of Ethereum, runs blockchain software company Consensys, and serves as chairman of the publicly traded Ethereum treasury company SharpLink.

As momentum gathers and well-known figures take the helm, the question becomes whether DATs (Digital Asset Treasuries) can continue to deliver returns, or if they are built on shaky foundations?

"If you have a good story and someone who can tell it well, you can bring more capital to Solana or Ethereum, and faster than ever before," Novogratz said in an interview.

Galaxy and Pantera are among the top ten DAT investors and lenders. This tight orbit also extends to dealmakers, with about a third of DAT deals involving the same handful of boutique investment banks. Overall, according to PitchBook data, the top ten DAT investors participated in about 14% of treasury deals in the past six months. Even excluding conservative estimates for the biggest players, such as Michael Saylor's Strategy Inc.'s major moves—DATs have attracted a record $15.4 billions in new capital this year.

For these three Princeton alumni, none of this was pre-planned. But something that has persisted since their undergraduate days is a taste for risk and a belief that "Wall Street can be rebuilt faster and lighter." Each has carved out their own path in finance or technology. Then their paths began to cross again. For more than a decade, they've exchanged ideas and investments—sharing notes, supporting projects, and occasionally entering deals together.

In May, Lubin helped create the Ethereum treasury company SharpLink Gaming, with Pantera and Galaxy among the investors. Lubin said friends only discuss DATs after investors are confirmed. Pantera and Galaxy are also both investors in the Ethereum treasury company BitMine Immersion. "We're friends, but we don't see each other every day," Lubin said in a recent interview. "But every time we meet, we have a lot to talk about."

Their companies also compete. In September, Pantera backed a new Solana-focused DAT called Helius. Just days earlier, Galaxy helped launch a rival called Forward Industries. This was not a coordinated action. "It just so happened that our companies both launched Solana DATs within a week," Morehead said. Novogratz expressed a similar view: "We probably should have called each other to talk, but we didn't."

Their paths keep crossing, sometimes purely by chance. When Morehead discovered that Novogratz had moved next door in Tokyo, the coincidence was almost surreal. Their alma mater now also reflects this shared legacy. In 2022, Novogratz, Lubin, Morehead, and Briger jointly funded Princeton University's new Center for Decentralization of Power through Blockchain Technology.

When the US Securities and Exchange Commission (SEC) signaled that it would not treat most tokens as securities, a window for deals opened—paving the way for a strategy pioneered by Saylor: raise funds, buy crypto assets, ride the stock price up, and repeat. "We really started to get more creative and aggressive in our thinking," Lubin said. "And it makes sense."

This approach paid off handsomely—until it didn't. In June, after Lubin-backed SharpLink filed to register a stock offering, its share price plunged 72% in a single day. BitMine dropped 40% after filing similar documents. These sell-offs serve as a reminder of the gut-wrenching volatility inherent in high-wire crypto experiments.

"SharpLink is here for the very long term," Lubin said. "Our current strategy is to continue raising funds under favorable conditions, keep buying ether and holding it long-term, and continue seeking and deploying ether into risk-adjusted, yield-advantaged scenarios."

This week, more than $1.5 billions in positions were forcibly liquidated in the crypto market, with no clear trigger.

These participants are still expanding their reach. Galaxy often acts as a service provider—staking tokens, designing DeFi strategies, and advising teams. Pantera has over $1 billions in DAT exposure and has backed more than 15 companies. "DATs are indeed providing a new type of investor with a way into the blockchain market," Morehead said.

Novogratz does not believe the market has peaked. "I don't think all DAT companies will succeed, but if they can reach critical mass—boosting base token yields and building ecosystems—I think they're positive for crypto overall. These are the publicly listed companies that will last long term."