He attributes this to structural factors that outweigh the limited methods firms have to increase their crypto-per-share value.
Crypto News
Bitwise Chief Investment Officer Matt Hougan argues that most digital asset treasury companies will trade below their cryptocurrency holdings. He attributes this to structural factors that outweigh the limited methods firms have to increase their crypto-per-share value.
Hougan outlined a framework treating DATs as finite entities subject to predictable downward price pressures. He identified illiquidity, operating expenses, and execution risk as certain forces pulling valuations below underlying cryptocurrency holdings.
The illiquidity discount stems from delayed access to assets. Hougan questioned why investors would pay full price today for Bitcoin they would receive in a year, noting that gaps between ownership and delivery create automatic markdowns.
Operating expenses directly reduce shareholder value according to Hougan's analysis. Every dollar spent on executive compensation or business operations comes from investor pockets, creating an ongoing drag on the company's net asset value.
Execution risk adds another layer of discount as investors price in the probability of operational mistakes. Hougan stated that firms must overcome these structural disadvantages before any premium to holdings becomes justifiable.
Only four primary strategies can offset the baseline discount: issuing debt, lending tokens, using options, and buying assets below market price. Hougan emphasized that these approaches only work under specific conditions and require flawless execution.
The structural drag compounds over time for perpetual treasury companies. Meanwhile, any gains in crypto-per-share must be repeated across market cycles, making sustained premiums difficult to maintain.
Broader sentiment around DATs continues shifting as regulated exchange-traded funds offer simpler exposure. Nate Geraci of The ETF Institute called spot crypto ETFs "DAT killers" that have ended the regulatory arbitrage period when treasuries thrived.
Bloomberg senior ETF analyst Eric Balchunas argued that ETFs serve the same function as DATs but with superior tracking of underlying asset performance. He noted that while some institutions can only hold stocks or bonds, giving companies like Strategy a niche, that audience alone cannot support multiple thriving treasury companies
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
