Most digital asset treasuries lag direct crypto holdings

A new analysis found that most publicly listed Digital Asset Treasuries trade below the value of their crypto holdings and that investors have usually done better by owning the underlying tokens directly.

The study examined the 20 largest Digital Asset Treasuries by assets under management and found that only four were trading at a market-to-net-asset-value ratio above one.

Digital Asset Treasuries, or DATs, are listed companies that make the accumulation and management of digital assets central to their business model. Unlike exchange-traded funds, which aim to track an underlying token closely, DATs trade as operating businesses, and their share prices also reflect financing choices, investor sentiment, and corporate strategy.

The distinction has grown more important as the market for crypto treasury companies has expanded sharply. According to the analysis, the total value of digital assets held by these companies has surpassed USD $180 billion after average annual growth of about 70% since 2020.

Much of that expansion came as smaller listed companies shifted toward holding digital assets in an effort to lift returns. The report argues that this created a short-lived bubble and that the market now places less value on the access premium that once supported these structures.

Premium fades

A key sector measure is market to net asset value, or mNAV, which compares a company's market capitalisation with the value of its crypto holdings. When the ratio is above one, investors are assigning a premium to the shares over the value of the underlying assets. When it is below one, the shares trade at a discount.

Most DATs now trade below the value of their holdings, the analysis found, pointing to weaker sentiment toward listed treasury vehicles. It also noted that mNAV does not account for debt or preferred equity structures, so the headline ratio may not capture the full financing risk facing shareholders.

Even among companies exposed to the same token, valuations can differ widely. The report attributes that gap to different approaches to capital raising, timing of purchases, and the pace of reserve accumulation.

Bit Digital and Strive were cited as examples of more aggressive accumulation strategies, using at-the-market share sales to keep buying reserves. By contrast, companies trading at wider discounts to net asset value were described as more passive.

Reflexive model

Many DATs are built on the idea that management can increase the number of tokens backing each share over time. Companies try to do this through new equity issuance, convertible debt, and additional revenue streams such as staking, mining, or adjacent operations that generate cash.

In theory, issuing stock at a premium allows a company to buy more tokens and increase value per share. Convertible debt can have a similar effect if it is raised on favourable terms and later converted into equity above the prevailing share price.

But these mechanisms work best when the underlying token is rising and the shares trade at a premium. Once mNAV falls below one, the model becomes harder to sustain because raising fresh capital is less attractive and the feedback loop weakens.

That helps explain why many DATs have seen their valuation premiums fade over time. Initial enthusiasm often peaks near launch, when retail and institutional interest is strongest, but demand for the shares can weaken even if the underlying token continues to rise.

Strategy, the company that pioneered the corporate Bitcoin treasury model, was highlighted as an early beneficiary of this dynamic. The analysis said it was able to compound its position because investor demand once supported persistent premiums to net asset value. That edge has narrowed as exchange-traded products, custody infrastructure, and regulated funds have become more widely available.

Mixed returns

Many DATs have succeeded in increasing tokens per share since inception, the report said, with net asset value per share in some accumulation-focused companies rising by as much as 400%. On that narrow measure, the business model can work.

Yet shareholder outcomes have often been weaker than simply owning the token. The analysis concluded that most leading DATs have underperformed their underlying digital assets since launch and that, where outperformance did occur, the margin was generally small relative to the risks investors assumed.

There were exceptions over shorter periods. In the past three months, some DAT shares outperformed their related tokens by 15% to 40% as mNAV ratios recovered from depressed levels of 0.5 to 0.8 times to around 0.7 to 1.0 times. The report described this as a catch-up trade driven more by sentiment than by a sharp increase in tokens per share.

PURR and Cypherphunk Technologies were among the companies identified as posting stronger short-term share gains than the underlying token. Those gains reflected improved crypto market sentiment rather than fundamental changes in asset backing, according to the analysis.

Bit Digital stood out for a different reason. The company was described as having maintained a notable premium partly because it broadened its non-crypto revenue base, with more than 89% of second-quarter revenue coming from its cloud infrastructure business, White Fibre.

Board scrutiny

The analysis argues that investors are likely to focus less on the size of a company's token holdings and more on management quality, capital structure, and alternative income sources. As direct access to digital assets has become easier, DATs can no longer rely on scarcity alone to justify a premium.

It also warned that some structures carry extra risk when they depend heavily on convertible or collateral-backed financing. In those cases, shareholders may be exposed not only to token price movements but also to shifts in equity market sentiment and financing terms.

The report cited Strategy as an example of a structure in which debt holders and dividend obligations could pressure reserves if market conditions deteriorate. The report said such features can strain investor confidence and make it harder to attract new capital.

For investors weighing the sector, the conclusion was blunt: Only a minority of Digital Asset Treasuries have delivered better returns than direct ownership of the asset, and future winners are likely to be judged less by how much crypto they hold than by the boards and capital structures behind them.