Digital Asset Treasury Companies Face Declining Market Premiums
- Only four of the top 20 digital asset treasury (DAT) companies trade above a market net asset value (mNAV) of 1.
- The companies trading at a premium are Bit Digital, Strive, Hyperliquid Strategies, and BitMine.
- Most DAT stocks have underperformed compared to simply holding the underlying cryptocurrency since the model’s inception in 2020.
- Sequans Communications has sold its remaining holdings of Bitcoin, exiting its treasury strategy entirely.
- Warnings about falling mNAVs have been raised by firms like Standard Chartered and Galaxy Digital, highlighting potential consolidation risks in the sector.
The decline in premiums for DAT stocks indicates reduced investor interest in crypto exposure through publicly traded companies, as evidenced by only four out of twenty maintaining a premium over their crypto holdings. This shift could lead to significant changes within the industry as companies struggle to raise capital without diluting shares.
With Bitcoin’s price fluctuating from over $126,000 to around $86,000 recently, the sustainability of the DAT model is increasingly questioned as it faces mounting challenges (Source).
