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Digital asset treasury companies, the publicly traded firms that park crypto on their balance sheets as a core strategy, are confronting a painful reality. The premium-to-NAV multiples that made the whole machine run are compressing, and in some cases, flipping negative. That means investors can now buy the stock and get less crypto exposure than if they just bought the tokens directly.
The reflexive loop that powered a boom
Companies like Strategy, formerly MicroStrategy under Michael Saylor, pioneered what became known as the DATCO model. The idea was elegant in its circularity: issue new shares through at-the-market (ATM) offerings when the stock trades above the net asset value of the company’s crypto holdings. Use the proceeds to buy more Bitcoin. The additional Bitcoin pushes the narrative, attracts more investors, and keeps the stock trading at a premium.
The metric that matters here is mNAV, or the market NAV multiple. When mNAV is above 1.0, the company’s market cap exceeds the value of its crypto stash, meaning there’s a premium baked into the stock. That premium is the fuel. It’s what makes each new share sale accretive, because you’re essentially selling a dollar’s worth of stock to buy more than a dollar’s worth of Bitcoin relative to existing shareholders.
During 2025, this model attracted staggering capital. Crypto treasury firms raised at least $86 billion for token acquisitions, a figure that surpassed total US IPO proceeds. Collectively, these public companies held over $100 billion in digital assets.
When premiums disappear, so does the strategy
Strategy’s mNAV has compressed to roughly 1.5x. For a company that built its entire capital formation strategy around selling shares at fat premiums, a shrinking multiple means each new issuance is less accretive.
For smaller players, the situation is worse. Firms like Bitmine and SharpLink Gaming now trade at discounts to their token holdings, meaning their mNAV has fallen below 1.0. At that point, issuing new shares to buy more tokens isn’t just unhelpful. It’s actively destructive to existing shareholders.
The dilution problem compounds quickly. Continuous ATM share sales flood the market with new stock, putting downward pressure on price. When the stock drops, the premium shrinks. When the premium shrinks, the next issuance is less effective. When the next issuance is less effective, investor confidence erodes. When confidence erodes, the stock drops further.
Too many copycats, not enough premium
When Strategy was one of a handful of companies running this playbook, it commanded scarcity value. Investors who wanted leveraged Bitcoin exposure through public equities had limited options. The premium reflected that exclusivity.
The $86 billion fundraising wave wasn’t just Strategy. It was a flood of imitators, each launching their own version of the crypto treasury model with varying degrees of sophistication. Some focused on Bitcoin, others on Ethereum, and some on a broader basket of tokens. The proliferation diluted the premium pool across many more participants.
These companies also face operational and regulatory headwinds that pure crypto holdings don’t. Public companies carry overhead, reporting obligations, management compensation, and governance requirements. When the stock trades at a premium, nobody cares about those costs. When it trades at or below NAV, those costs become friction that makes the public vehicle inferior to simply holding the underlying asset.
What this means for investors
For traditional investors who used companies like Strategy as a proxy for Bitcoin in portfolios where direct crypto holdings weren’t permitted, the calculus is changing. If these stocks don’t offer meaningful premium to NAV, and instead carry dilution risk and management overhead, the case for owning them over spot Bitcoin ETFs weakens considerably.
The liquidity risk is significant. If multiple treasury companies need to raise capital simultaneously during a market downturn, and their stocks are already trading at or below NAV, the traditional funding mechanism breaks. They can’t issue shares without destroying value. They may face pressure to sell crypto holdings to meet obligations, which puts additional downward pressure on token prices, which further compresses NAV multiples across the entire sector.
A company trading at 0.7x NAV presents a potential value play if you believe the discount will narrow. But the risk-reward profile has shifted materially from riding the reflexive upswing.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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