[Face-to-Face with Crypto Experts] How to Evaluate DAT (Digital Asset Treasury Companies)? Be Cautious If This Indicator Is Less Than 1!

In this installment of 'Face-to-Face with Crypto Titans,' we once again invited Matthew Sigel, a senior fund manager in the industry. This episode focuses on DATs (Digital Asset Treasury companies, which incorporate crypto into their balance sheets, such as $Strategy (MSTR.US)$$Bitmine Immersion Technologies (BMNR.US)$The video will provide a quick overview of the metrics used by professional institutions in evaluating DAT companies, as well as the reasonable range for these metrics.

Matthew serves as the Head of Digital Asset Research at VanEck, where he manages multiple cryptocurrency-related ETFs. The firm is widely regarded on social media as having the most accurate Bitcoin forecasts.

The following is a summary of the guest's viewpoints:

One key method for valuing digital asset treasury companies involves dividing the equity market capitalization by the total market value of the Bitcoin holdings, yieldingthe "mNAV multiple" (Net Asset Value Multiple)as a core reference point for the market to assess its value.

The "Bitcoin holdings per share" is the survival rule for such companies.

Focus on technical trends, and trade CALL/PUT options in batches by buying low and selling high. $Strategy (MSTR.US)$ For example, the average premium of its mNAV is approximately between 50% and 80%. The CEO, Michael Sayler, centers his strategy around"Bitcoin holdings per share."Measuring corporate value—this is precisely thecore guiding principlefor all digital asset treasury companies. To increase Bitcoin holdings per share, these companies are willing to issue new shares and dilute existing shareholders' equity, provided that they can augment their Bitcoin reserves in a manner deemed 'beneficial to shareholders.'

If mNAV exceeds 1, it equates to possessing a 'license to print money':the company can issue stock in exchange for Bitcoin, thereby driving up Bitcoin holdings per share. In the long term, this business model even has the potential tooutperform the appreciation of Bitcoin itself.。

The reasonable boundary of premium

We believe that a certain level of premium is justified—especially for companies like Strategy, which has direct collaborations with top global fixed-income investors. Strategy's innovation lies in packaging Bitcoin's volatility into securities that fixed-income investors can purchase, significantly enhancing the Bitcoin per share for digital asset treasury companies. However, higher premiums are not always better.

Some may argue that 'companies with an mNAV below 1x are attractive,' but how can the value of such companies be realized? This raises significant doubts: the only way to improve mNAV is to 'sell Bitcoin and repurchase shares.' However, many executives enjoy high salaries and are reluctant to give up their compensation or allow the company’s scale to shrink. Therefore, in the long run, it may requireActive investor interventionis necessary to unlock the value of companies whose mNAV is below 1x.

Investment Recommendation: Focus on the 'Safe Range' and Those with 'Clear Strategies'

In my personal view,an mNAV below 1x is actually a warning signal, suggesting potential operational or governance issues within the company.。

Unless the company has announced a share buyback plan, such as Tom Lee’s Ethereum-focused $Bitmine Immersion Technologies (BMNR.US)$ , which committed to repurchasing shares if the mNAV falls below 1x. However, in reality, very few companies implement such shareholder-friendly structures, so we remain cautious about digital asset treasury companies (DATs) with an mNAV below 1x.

By contrast, we preferan mNAV range between 1x and 1.7x.Companies in this range are typically able to access the debt market for financing and secure diversified funding sources.

Moreover, there has been a recent surge in the number of digital asset treasury companies, with many hastily launched products varying significantly in quality. Therefore, investors should prioritize:

1. Largercompanies (with the scale advantage to enter the debt market);

2. Companies that dare to disclose contingency plans when valuations fall below the value of their held crypto assets.

Risk Warning: Beware of equity dilution and leverage

Finally, a prevalent issue in this field is 'shareholder equity dilution'—frequent issuance of new shares by companies can dilute the ownership percentage of existing shareholders. Thus, investors must exercise caution.Pay attention to position control and use leverage cautiously.。

In summary, the core investment focus for digital asset treasury companies lies in the growth potential of "Bitcoin holdings per share"; the safety margin for valuation, meanwhile, is embedded in the balance between the "mNAV multiple" and the "willingness of corporate governance."

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