The surge of digital asset treasury (DAT) firms—driven by the success of Strategy’s Bitcoin acquisitions—has highlighted cryptocurrencies like Bitcoin, Ether, and Solana. However, this attention has waned recently as the market net asset values (mNAVs) of numerous DATs have plunged, increasing risks for smaller companies, Standard Chartered cautioned on Monday.
Within the DAT sector, mNAV indicates the ratio of a firm’s enterprise value to its cryptocurrency holdings. An mNAV above 1 permits a company to issue new shares and continue acquiring digital assets. When it falls below this threshold, expanding holdings becomes significantly more difficult and less wise.
Standard Chartered pointed out that multiple well-known DAT firms have dipped below this crucial level, effectively hindering their ability to continue purchasing.
“The recent downturn in DAT mNAVs will likely lead to differentiation and market consolidation,” the bank stated. “Differentiation will benefit the largest players, those offering cost-effective funding, and firms with staking yield”—referring to prominent entities like Strategy (MSTR) and Bitmine (BMNR), as well as companies capable of securing low-cost debt.
The research monitored firms including Strategy, Bitmine, Metaplanet (MTPLF), Sharplink Gaming (SBET), Upexi (UPXI), and DeFi Development Corp (DFDV), illustrating how their valuations have diminished in recent weeks.
The bank highlighted that mNAV suppression stems from market saturation, increasing investor caution, unsustainable business models, and the rapid growth of Ether (ETH) and Solana (SOL) treasury strategies.
“We consider market saturation the main cause of the recent mNAV compression,” the analysts mentioned, noting that Strategy’s success in Bitcoin acquisition has already spawned 89 imitators.
If mNAVs stay low, Standard Chartered anticipates consolidation within the sector, where larger players could acquire weaker rivals. For instance, Strategy might continue its aggressive Bitcoin purchasing by acquiring treasury counterparts at discounted rates, suggested the bank.
Related: Strategy’s Bitcoin stash reaches $73B with 638,985 BTC in treasury
Digital asset treasury companies face increasing challenges
While various publicly listed firms have integrated cryptocurrencies into their balance sheets, digital asset treasuries have taken this concept further by prioritizing these holdings as the core of their business strategy.
Alongside Standard Chartered, Cointelegraph has previously highlighted the risks associated with this model, noting that some companies have abandoned struggling core businesses to rebrand as crypto treasuries, aiming to capitalize on the digital asset surge.
Venture firm Breed has also echoed these concerns. In June, the company warned that only a few Bitcoin treasury firms are likely to evade a “death spiral” instigated by falling mNAVs.
“Ultimately, only a select few companies will maintain a lasting mNAV premium. They will earn it through strong leadership, disciplined execution, savvy marketing, and distinctive strategies that ensure growth in Bitcoin-per-share, irrespective of broader market fluctuations,” Breed’s analysts articulated.
New York Digital Investment Group (NYDIG) has also emphasized the diminishing premiums of DATs, as the gap between stock prices and underlying crypto holdings continues to shrink.
The factors driving this compression include “investor anxiety over upcoming supply unlocks, changing corporate objectives from DAT management teams, tangible increases in share issuance, investor profit-taking, and limited differentiation among treasury strategies,” stated NYDIG’s global head of research, Greg Cipolaro.
Other observers draw sharper parallels. Josip Rupena, CEO of crypto lending firm Milo, likened DAT strategies to collateralized debt obligations—the intricate financial products that contributed to the 2008 financial crisis:
“There’s this aspect where people take what is a pretty sound product, a mortgage back in the day or Bitcoin and other digital assets today, for example, and they start to engineer them, taking them down a direction where the investor is unsure about the exposure they’re getting.”
Related: Mega Matrix files $2B shelf to build Ethena stablecoin governance treasury
