The crypto treasury model, which once offered digital asset treasury (DAT) companies a strategic advantage in expanding their crypto holdings, is losing its effectiveness as stock premiums fade. According to a recent report by DWF Ventures, most of the largest DAT firms now trade below the net asset value (NAV) of their crypto assets, raising questions about the sustainability of this financing approach. This shift affects how these companies raise capital and manage shareholder value, signaling a potential turning point for crypto treasury strategies.
Why this matters
The rise of digital asset treasury companies marked an innovative chapter in crypto finance. By holding significant cryptocurrency reserves on their balance sheets, these companies offered investors a proxy exposure to digital assets through publicly traded shares. When DAT stocks traded at premiums above the value of their crypto holdings—known as mNAV—this structure allowed companies to raise capital by issuing shares at a premium and using the proceeds to buy more crypto without diluting existing shareholders’ stakes.
This mechanism became a vital growth engine for firms like MicroStrategy, which popularized the Bitcoin treasury model starting in 2020. At its peak, this model allowed companies to leverage equity financing efficiently, amplifying their crypto exposure at a lower cost. For investors, it offered an alternative way to invest in crypto markets without purchasing digital assets directly, often with the potential for additional upside through strategic management and corporate execution.
However, as Bitcoin price volatility intensifies and market dynamics evolve, those premiums have diminished or reversed, undermining the core advantage that supported this strategy. This shift affects liquidity, capital-raising ability, and long-term outlooks for DAT firms, while also reflecting broader investor sentiment about crypto exposure in public markets.
What is happening
DWF Ventures’ report highlights that only four of the 20 largest digital asset treasury companies currently trade at a premium to their crypto holdings. These include Bit Digital, Strive, Hyperliquid Strategies, and BitMine. Meanwhile, the majority are trading below their net asset value, indicating that investors are less willing to pay extra for exposure through these firms, preferring instead to buy crypto assets directly or explore other investment avenues.
This trend is particularly notable since the model's inception, when significant premiums were common and stocks often outperformed holding the actual cryptocurrency. For example, since Michael Saylor’s pioneering of the Bitcoin treasury approach in 2020, many DAT stocks initially offered additional value but have since underperformed or only marginally outpaced direct crypto holdings, according to DWF.
A recent development illustrating this changing landscape is Sequans Communications’ complete exit from its Bitcoin treasury strategy. The French semiconductor company sold its remaining 314 BTC, ending a process that began with redeeming convertible debt earlier in 2026. This move signals caution among firms about maintaining crypto exposure on corporate balance sheets amid uncertain investor appetite and regulatory conditions.
Industry voices have previously warned about the fragility of the DAT financing model. Standard Chartered raised concerns about an “mNAV collapse” in 2025, while Galaxy Digital emphasized that the model depends heavily on persistent equity premiums to NAV to remain viable. Without these premiums, raising capital becomes dilutive, and the financing mechanism risks breaking down. Bitcoin’s price fluctuations—from a record high exceeding $126,000 in late 2025 to drops below $60,000 before recovering—have further pressured this dynamic.
What readers can take away
- The crypto treasury model relies on a premium where DAT stocks trade above the value of their crypto holdings; this premium has diminished for most companies.
- Falling stock premiums limit DAT firms' ability to raise capital through equity without diluting shareholders, weakening their expansion potential.
- Direct exposure to cryptocurrencies could be increasingly favored by investors over investing in DAT stocks due to fading premiums and underperformance.
- Some companies, such as Sequans Communications, are exiting the treasury strategy, indicating caution about holding crypto on corporate balance sheets.
- Volatility in Bitcoin and broader crypto markets remains a key factor influencing the viability of the digital asset treasury approach.
What to watch next
Upcoming trends to monitor include whether more DAT companies follow Sequans Communications’ lead in winding down crypto holdings. Additionally, shifts in regulation, market liquidity, and Bitcoin price movements will influence whether stock premiums stabilize, recover, or deteriorate further. The ability of DAT firms to innovate financing strategies or diversify holdings may determine their future success amid these challenges.
FAQ
What is a digital asset treasury (DAT) company?
A DAT company is a publicly traded firm that holds significant cryptocurrency assets on its balance sheet. These companies offer investors a way to gain crypto exposure indirectly through stock ownership instead of directly buying the underlying digital assets.
Why do DAT stocks trade at a premium or discount to their crypto holdings?
When a DAT stock trades at a premium, it means investors value the company above the market value of its crypto assets, often due to expected management benefits or financing advantages. A discount implies hesitation or negativity about the company’s prospects or the crypto market, resulting in the stock trading below the net asset value (NAV) of its holdings.
What risks are associated with the crypto treasury model?
The main risk is that if the premium disappears and stocks trade at or below NAV, DAT firms must raise capital at a loss to shareholders, diluting ownership and weakening growth potential. Additionally, volatility in crypto prices can impact the value of holdings and investor sentiment, affecting stock performance and financing options.
This article is informational only and is not financial advice. Original source: read more here.
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