Bitwise Chief Funding Officer Matt Hougan outlined a valuation framework for digital asset treasury corporations (DATs) and stated that evaluation of the sector typically misunderstands how these companies ought to be priced relative to the belongings they maintain.
In a collection of posts, Hougan stated the core query for valuing any DAT is to think about what the corporate can be value if it had a set lifespan.
Illiquidity, Bills, and Threat
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 12 months introduces circumstances that may push valuations above or beneath the underlying asset worth.
Hougan stated three primary elements justify a reduction to mNAV: illiquidity, bills, and danger. Illiquidity displays the cheaper price traders would pay in the present day for Bitcoin they’d obtain in a 12 months, and Hougan means that the low cost could possibly be 5-10%. Bills straight cut back investor worth, and a DAT holding $100 value of BTC per share however paying executives $10 per share per 12 months would warrant a corresponding 10% low cost. Threat, outlined as the potential of operational errors or different failures, should even be factored into pricing.
On the opposite facet, the Bitwise exec stated DATs could commerce at a premium provided that they’re rising their crypto-per-share, and famous that within the US, that is the only real motive 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 equivalent to writing name choices to generate further earnings, and buying crypto at a reduction.
Discounted acquisitions can happen by way of buying locked belongings from foundations looking for liquidity, buying one other DAT buying and selling beneath 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 usually sure whereas premium-enabling elements are usually unsure. This finally ends up creating what he described as a excessive hurdle for many DATs. Consequently, he stated most corporations will commerce at a reduction, with solely a restricted variety of robust performers buying and selling at a premium. Utilizing the instance of a Bitcoin DAT scheduled to liquidate in 12 months, he stated truthful worth may be estimated by calculating bills, including a danger low cost, and offsetting these with expectations for will increase in bitcoin-per-share.
Though DATs wouldn’t have fastened lifespans in apply, the exec stated this extends slightly than modifications the mannequin, as a result of bills and dangers compound over time, whereas corporations that may develop crypto-per-share constantly could turn into extremely helpful.
He additionally stated 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 larger divergence forward, with a small variety of companies executing nicely sufficient to commerce at a premium and lots 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 accordance 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 total exercise.
For the reason that 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 belongings made up 11.2% of annual spending.
The submit Bitwise’s Matt Hougan Reveals Why Most Crypto Treasury Corporations Ought to Really Commerce at a Low cost appeared first on CryptoPotato.