Bitwise’s Matt Hougan believes that bigger DATs acquire main benefits in debt markets, lending capability, derivatives entry, and M&A alternatives.
Bitwise Chief Funding Officer Matt Hougan outlined a valuation framework for digital asset treasury firms (DATs) and mentioned that evaluation of the sector typically misunderstands how these companies must be priced relative to the belongings they maintain.
In a sequence of posts, Hougan mentioned the core query for valuing any DAT is to contemplate what the corporate could be price if it had a set lifespan.
Illiquidity, Bills, and Danger
He explained {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 at least one yr introduces situations that may push valuations above or beneath the underlying asset worth.
Hougan mentioned three essential components justify a reduction to mNAV: illiquidity, bills, and threat. Illiquidity displays the lower cost buyers would pay immediately for Bitcoin they’d obtain in a yr, and Hougan means that the low cost might be 5-10%. Bills instantly scale back investor worth, and a DAT holding $100 price of BTC per share however paying executives $10 per share per yr would warrant a corresponding 10% low cost. Danger, outlined as the opportunity of operational errors or different failures, should even be factored into pricing.
On the opposite aspect, the Bitwise exec mentioned 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 similar to writing name choices to generate extra revenue, and buying crypto at a reduction.
Discounted acquisitions can happen via buying locked belongings from foundations in search of 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 components are usually sure whereas premium-enabling components are usually unsure. This finally ends up creating what he described as a excessive hurdle for many DATs. Because of this, he mentioned most firms will commerce at a reduction, with solely a restricted variety of sturdy performers buying and selling at a premium. Utilizing the instance of a Bitcoin DAT scheduled to liquidate in 12 months, he mentioned honest worth may be estimated by calculating bills, including a threat low cost, and offsetting these with expectations for will increase in bitcoin-per-share.
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Though DATs should not have fastened lifespans in follow, the exec mentioned this extends relatively than adjustments the mannequin, as a result of bills and dangers compound over time, whereas firms that may develop crypto-per-share persistently could develop into extremely useful.
He additionally mentioned 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 higher divergence forward, with a small variety of companies executing properly sufficient to commerce at a premium and plenty of others buying and selling at a reduction.
In the meantime, DAT firms have invested at the least $42.7 billion into crypto acquisitions in 2025, based on CoinGecko’s latest report. It was found that $22.6 billion was deployed within the third quarter alone, which makes it the strongest quarter on document for accumulation. Altcoin-focused DAT firms accounted for $10.8 billion, or 47.8%, of Q3 spending, however Bitcoin-focused companies continued to dominate general exercise.
For the reason that begin of 2025, Bitcoin DAT firms 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.
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