Why Most Crypto Treasury Firms Should Trade at a Discount, According to Bitwise CIO Matt Hougan

Bitwise Chief Investment Officer Matt Hougan has introduced a valuation framework for digital asset treasury companies, arguing that the market often misunderstands how these firms should be priced relative to the crypto they hold.

According to Hougan, the simplest way to evaluate a DAT is to imagine it had a fixed lifespan. If a Bitcoin-focused treasury were to shut down immediately and distribute its BTC the same day, it would naturally trade at its exact net asset value, or an mNAV of 1.0. But once the liquidation timeline extends—say, to a year—the picture changes. Illiquidity, expenses, and operational risks begin to influence valuations, often pushing them below asset value.

Hougan said investors typically apply a discount because crypto delivered a year from now is worth less than crypto delivered today. He estimates illiquidity alone may justify a 5–10% markdown. Ongoing costs also matter: a DAT holding $100 of BTC per share but spending $10 annually per share on operations would naturally trade 10% below mNAV. Additional discounts stem from risks such as mismanagement, custody issues, or structural failures.

Premiums are possible, but Hougan stressed they are uncommon and rely on one thing: the firm must reliably increase its crypto-per-share. In the US, he said, this is the only valid reason for a DAT to trade above asset value. He identified four primary methods for achieving this: issuing dollar-denominated debt to buy more crypto, lending assets to earn yield, writing derivatives for extra income, or acquiring crypto at a discount.

Discounted acquisitions can take several forms—buying locked tokens from a foundation seeking liquidity, purchasing another DAT trading below its own asset value, conducting share buybacks when the firm itself is discounted, or acquiring a revenue-generating business and converting those earnings into crypto holdings.

Hougan noted that discount factors tend to be predictable, while premium drivers are harder to guarantee. This creates what he calls a high hurdle, meaning most DATs will naturally trade at a discount while only a select few—those consistently growing crypto-per-share—can command a premium.

While these companies don’t actually have fixed lifespans, the same logic applies: expenses and risks accumulate over time, but firms that compound their crypto-per-share can become remarkably valuable. Larger DATs especially benefit from scale, gaining superior access to debt financing, larger lending pools, deeper derivatives markets, and greater opportunities for discounted acquisitions.

Despite many DATs moving in sync in recent months, Hougan expects the sector to diverge substantially. A small number of high performers may trade above mNAV, while many others remain firmly in discount territory.

Industry data shows the sector has been highly active. CoinGecko reports that DATs invested more than $42.7 billion into crypto accumulation in 2025, including a record-setting $22.6 billion in Q3 alone. Bitcoin-focused DATs remain the dominant buyers, accounting for over $30 billion—roughly 70%—of this year’s acquisitions. Ethereum-focused treasuries followed with nearly $8 billion in purchases, while firms targeting altcoins such as SOL, BNB, and WLFI made up just over 11% of total spending.