In the span of just a few months, a corporate copycat phenomenon has swept through digital assets.

The playbook, pioneered by Michael Saylor’s bitcoin-hoarding behemoth, Strategy, is ostensibly simple: create or rebrand a publicly traded company, raise money through debt and equity, use the proceeds to buy a single cryptocurrency (usually bitcoin, but increasingly others like ether, solana and avalanche) and market the stock as a safer and often leveraged way for investors to gain crypto exposure without holding the tokens themselves.

Fueled by rising crypto prices and a friendlier regulatory environment for digital assets, the model has worked spectacularly for some. Since Strategy’s first bitcoin purchase in August 2020, its stock is up over 2,200% and has mostly traded for a significant premium to the value of the bitcoin it holds on its balance sheet. Japan’s Metaplanet, which adopted a similar “digital asset treasury” (DAT) model in April 2024, has soared 3,830% since it began buying crypto.

It has become so attractive, in fact, it has given rise to an industry of its own. According to Elliot Chun from Architect Partners, a Palo Alto-based financial advisory firm tracking the trend, 228 publicly traded companies have announced DAT strategies—most of them just in 2025—with a collective $148 billion funneled into crypto on the belief that holding tokens will turbo charge their stock value as it has for Strategy.

Leave it to crypto to create a new “metric” for what the closed-end fund world has long described as either a discount or a premium to net asset value. Market to net asset value, or mNAV, measures a company’s market capitalization relative to the value of the crypto it holds. Given the recent excitement around the industry, the vast majority of DAT companies are trading at or above 1.0, meaning their stock prices equal or exceed the per-share value of the crypto in their coffers.

But about 15% of DAT companies are trading below their crypto’s NAVs, or with an mNAV under 1.0 (meaning the business is worth less than the tokens on its balance sheet). Out of 168 bitcoin-holding public companies tracked by BitcoinTreasuries.NET, 26 are trading effectively at a discount. Solana-focused treasuries are seeing similar pressure: data from crypto analytics firm Artemis shows their mNAV premium has fallen roughly 30% in recent weeks—from 2.8 to 2.0.

Kevin Li, research analyst at ParaFi Capital, believes mNAV is similar to the price-to-earnings ratio for the crypto-carrying corporations. Instead of focusing on earnings, he contends that these companies grow by increasing the digital asset per share on their balance sheets. Those that hold proof-of-stake tokens like ether or solana can “organically” grow assets through staking—locking tokens to help secure a blockchain network and earn yield—which helps explain why their mNAVs often run higher than bitcoin-only peers.

The recent compression in mNAV reflects an oversaturation of crypto equity, Li adds. "We're in a period in which we're really shaking out the people who're here for the money, the mercenaries.”

Trading below NAV might make it harder for these firms to raise fresh capital—whether through debt or equity—to buy more crypto. But it isn’t fatal, and for value investors, looking to buy $1.00 for 80 cents, it could create a buying opportunity.

“The people who are surprised that this is happening just haven't looked at Strategy’s history, which has spent much of 2022-2023 trading below its NAV. During periods of lower prices or volatility, these mNAVs tend to compress,” says Matt Hougan, CIO of crypto asset manager Bitwise. And “there's nothing about trading below NAV that doesn't allow great management teams to increase their coins per share through staking, lending or other types of hedge fund-like work,” he continues.

If the discount persists, one way to defend NAV would be to sell a portion of tokens and buy back shares, but that would be a “death cry” for these businesses, Hougan warns.

Frank Chaparro, head of content and special projects at market maker GSR, argues that effective communication from the management matters just as much. “We're still pretty nascent in terms of the broader investment community’s understanding of these vehicles. Many DATs don’t have analyst coverage, and discounts add to that distrust,” he says. So “adding transparency to the equation, proactively communicating what they're doing and how they're differentiated can help shore up confidence among investors.”

“It’s very apparent to me that not all DATs have their strategy figured out yet, but the right teams are going to be able to outperform and defend their premium to mNAV or whatever metric we end up using in the long-term,” echoes Architect Partners’ Chun.

Cosmo Jiang, general partner at Pantera Capital (which has invested over $500 million across numerous DATs, including its own called Solana Company) thinks most digital asset treasuries are actually supposed to trade below or at NAV, just like startups in other sectors. The more important metric investors should focus on to determine a company’s growth prospects, in his opinion, is volume.

“If the name of the game for DATs is your ability to drive excitement about the underlying token and the ability to express that excitement to a whole new set of investors, then volume is your biggest determiner of success. And, of course, the amount of growth in tokens per share,” Jiang explains.

So should investors buy crypto treasury companies whose mNAVs are signaling a deep discount? Bitwise’s Hougan believes that at some point these bargains become too cheap to ignore—either acquirers step in or corporate activists force an unwind.

“The question is how long is your time frame? If these assets are trading at deep discounts to NAV and have no encumbering liabilities, it’s probably a good strategy to hold, but you have to be comfortable with the discount widening,” he adds. “I’d compare it to buying GBTC at a discount. You could have bought it at a 10% discount and seen it fall to 20%. You had to be willing to endure that. This isn’t quite the same—there’s no clear pathway to an ETF—but the principle is similar for very risk-tolerant investors.”

Pantera’s Jiang thinks investors should focus on the companies whose management understands how traditional finance investors think, can speak their language and can understand how to tap capital markets. Convertible debt and preferred-share financing, which Saylor’s Strategy has been successfully utilizing to grow into a $90 billion dollar giant, are only efficient once a company reaches scale, he notes, since the cost of capital is prohibitively high for smaller firms.

“I'd imagine that at least 50% of those publicly traded companies won't be around in five years either because they were acquired or because they mismanaged their digital assets or because they were not able to execute the strategy,” says Chun. “But I also believe we’ll see a group of about 15 DATs that are going to outperform the Magnificent 7 and will become household names by 2034.”