I want everything to go through the MK5, so that Atom dac will work for my purposes, what about the sound blaster? it seems more geared towards gaming and people say is the best
After looking into it a bit more, I no longer think an Atom DAC is the right solution here.
Your mk5 already has a great DAC built in, so i would just use that one.
To get digital from the PS5 to the mk5, here are a few options:
PS5->USB->Hifime UT23->Toslink->mk5 Toslink in
PS5->USB->SMSL PO100 Pro->Toslink/Coax->mk5 digital in
PS5->HDMI->AmazonBasics HDMI Extractor (or similar)->Toslink/Coax->mk5 digital in
I would expect the USB signal to be identical to the HDMI signal, but I haven't seen measurements yet.