• Japanese Bitcoin treasury firms keep outperforming BTC itself
• Harsh crypto tax laws push Japanese investors into DAT (Digital Asset Treasury) stocks
• Crypto gains taxed up to 55%, while stock gains taxed at around 20%
• DAT stocks trade at strong premiums because they offer BTC exposure without high taxes
• U.S. Bitcoin treasury stocks struggle to outperform ETFs
• Japanese regulators concerned about volatility and backdoor listings
• Possible tax code changes may end the DAT advantage soon

Bitcoin treasury companies have been under pressure globally, especially in the U.S., where many of them struggle to outperform simple Bitcoin ETFs. At a recent industry event in Hong Kong, frustration was growing as several speakers argued that buying an ETF is often better than holding shares in treasury companies. But in Japan, the situation is completely different — and the reason is simple: tax policy.

In Japan, companies that hold Bitcoin on their balance sheets, known as Digital Asset Treasury (DAT) firms, are consistently outperforming the price of BTC itself. This is not because these companies operate differently or use special strategies. Instead, their strong performance comes from Japan’s tax rules, which unintentionally push investors toward DAT stocks and away from holding crypto directly.

Japan taxes crypto profits as miscellaneous income, meaning they are combined with salary and other earnings. This results in very high tax rates, reaching up to 55% for top earners. On top of that, crypto gains cannot be offset with losses from other investments, and they cannot be carried forward to future years. This makes holding crypto directly risky and expensive for many individuals.

Stocks, on the other hand, are treated much more favorably. Equity gains are taxed at around 20%, loss carryforwards are allowed, and the reporting process is far simpler. Because of this big difference, Japanese investors who want Bitcoin exposure prefer to buy shares of companies that hold BTC instead of buying Bitcoin themselves. These DAT stocks let investors enjoy BTC upside while staying inside the low-tax equity category.

This tax-driven demand has pushed the share prices of Japanese DAT firms far above the value of the Bitcoin they hold. The premiums are not random — they reflect a strong financial incentive created by Japan’s tax system. By comparison, U.S. Bitcoin treasury stocks rarely trade far above their underlying BTC value because the tax environment is more neutral.

However, this success story may not last. Japanese regulators are becoming increasingly uneasy with the volatility they helped create. The Tokyo Stock Exchange and Japan Exchange Group have warned companies about using DAT strategies as “backdoor listings.” They have tightened their auditing processes and expressed concerns that retail investors may not fully understand the risks tied to these firms.

Other countries in Asia are also watching carefully. Regulators in Hong Kong, India, and Australia have raised similar doubts about the DAT model and are discouraging companies from adopting the strategy.

Most importantly, Japan’s tax authority is now considering a major change to the way crypto is taxed. If the government decides to lower crypto tax rates or allow loss offsets, the advantage of holding DAT stocks could disappear very quickly. In that case, Japanese investors may follow the same advice given elsewhere: “just buy an ETF.”

For now, Japanese Bitcoin treasury companies continue to outperform BTC thanks to a unique tax environment — but their edge might not last much longer.

Final Thought

Japan’s DAT boom is a reminder that tax policy can shape entire markets. While high crypto taxes have pushed investors into Bitcoin-linked stocks, any change in tax rules could shift demand overnight. If Japan updates its tax system, the DAT premium could vanish, leaving ETFs as the simpler choice for Bitcoin exposure.