Bitwise Chief Funding Officer Matt Hougan outlined a valuation framework for digital asset treasury corporations (DATs) and mentioned that evaluation of the sector typically misunderstands how these companies needs to be priced relative to the property they maintain.
In a sequence of posts, Hougan mentioned the core query for valuing any DAT is to think about what the corporate could be value if it had a set lifespan.
Illiquidity, Bills, and Danger
He defined {that a} Bitcoin-focused DAT asserting a same-day shutdown and distribution of its holdings would commerce precisely on the worth of its bitcoin, or an mNAV of 1.0, whereas extending the liquidation timeline to 1 yr introduces circumstances that may push valuations above or under the underlying asset worth.
Hougan mentioned three predominant elements justify a reduction to mNAV: illiquidity, bills, and danger. Illiquidity displays the cheaper price traders would pay as we speak for Bitcoin they might obtain in a yr, and Hougan means that the low cost may very well be 5-10%. Bills immediately scale back investor worth, and a DAT holding $100 value of BTC per share however paying executives $10 per share per yr would warrant a corresponding 10% low cost. Danger, outlined as the potential for operational errors or different failures, should even be factored into pricing.
On the opposite aspect, the Bitwise exec mentioned DATs might commerce at a premium provided that they’re growing their crypto-per-share, and famous that within the US, that is the only real purpose for such a premium. He recognized 4 methods DATs use to perform this: issuing USD-denominated debt to purchase crypto, lending out crypto to earn curiosity, utilizing derivatives similar to writing name choices to generate further revenue, and buying crypto at a reduction.
Discounted acquisitions can happen via buying locked property from foundations looking for liquidity, buying one other DAT buying and selling under its asset worth, repurchasing its personal discounted shares, or shopping for a cash-flow-generating enterprise and allocating the proceeds to crypto.
“Excessive Hurdle”
Hougan added that low cost elements are typically sure whereas premium-enabling elements are typically unsure. This finally ends up creating what he described as a excessive hurdle for many DATs. In consequence, he mentioned most corporations will commerce at a reduction, with solely a restricted variety of sturdy performers buying and selling at a premium. Utilizing the instance of a Bitcoin DAT scheduled to liquidate in 12 months, he mentioned truthful worth will be estimated by calculating bills, including a danger low cost, and offsetting these with expectations for will increase in bitcoin-per-share.
Though DATs don’t have fastened lifespans in apply, the exec mentioned this extends fairly than modifications the mannequin, as a result of bills and dangers compound over time, whereas corporations that may develop crypto-per-share constantly might change into extremely precious.
He additionally mentioned bigger DATs have structural benefits, together with simpler entry to debt markets, bigger swimming pools of crypto for lending, deeper choices markets, and broader alternatives for mergers, acquisitions, or different discounted offers. Whereas DATs have largely moved in tandem over the previous six months, Hougan expects better divergence forward, with a small variety of companies executing effectively sufficient to commerce at a premium and plenty of others buying and selling at a reduction.
In the meantime, DAT corporations have invested no less than $42.7 billion into crypto acquisitions in 2025, in line with CoinGecko’s latest report. It was discovered that $22.6 billion was deployed within the third quarter alone, which makes it the strongest quarter on report for accumulation. Altcoin-focused DAT corporations accounted for $10.8 billion, or 47.8%, of Q3 spending, however Bitcoin-focused companies continued to dominate general exercise.
Because the begin of 2025, Bitcoin DAT corporations have bought greater than $30 billion in BTC, which represented 70.3% of complete acquisitions. Ethereum counterparts adopted with $7.9 billion in purchases, most of it in August, whereas SOL, BNB, WLFI, and different property made up 11.2% of annual spending.
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