Bitwise’s Matt Hougan reveals why most crypto treasury firms should actually be trading at a discount

Bitwise’s Matt Hougan believes that larger DATs are reaping big benefits in debt markets, borrowing capacity, access to derivatives, and M&A opportunities.

Bitwise Chief Investment Officer Matt Hougan outlined a valuation framework for digital asset treasury companies (DATs), saying industry analysis often misunderstands how to price these companies relative to the assets they own.

In a series of posts, Hougan said the key question in valuing DAT is to think about what the company would be worth if it had a fixed lifespan.

Illiquidity, costs and risk

He explained that a Bitcoin-focused DAT announcing a close and distribution of its assets on the same day would trade exactly at the value of its bitcoin, or an mNAV of 1.0, while extending the liquidation timeline to one year introduces conditions that could push valuations above or below the underlying asset value.

Hougan said three key factors justify a discount on mNAV: illiquidity, cost and risk. The illiquidity reflects the lower price investors would pay today for Bitcoin they would receive a year from now, and Hougan suggests the discount could be 5-10%. The cost directly reduces value for investors, and a DAT that owns $100 in BTC per share but pays managers $10 per share per year would warrant a corresponding 10% discount. Risk, defined as the possibility of operational errors or other disruptions, must also be factored into pricing.

On the other hand, the Bitwise executive said that DATs should only trade at a premium if they increase their crypto-per-share, noting that in the US this is the only reason for such a premium. He identified four strategies DATs use to achieve this: issuing USD-denominated debt to buy crypto, lending crypto to earn interest, using derivatives such as writing call options to generate additional income, and acquiring crypto at a discount.

Discounted acquisitions can take place by buying locked up assets from foundations looking for liquidity, acquiring another DAT trading below asset value, buying back shares at a discount, or buying a cash flow generating company and allocating the proceeds to crypto.

“High Obstacle”

Hougan added that discount factors tend to be certain, while premium drivers tend to be uncertain. This ultimately leads to what he described as a major hurdle for most DATs. As a result, he says most companies will trade at a discount, while only a select few strong performers will trade at a premium. Using the example of a Bitcoin DAT that will be liquidated within 12 months, he said fair value can be estimated by calculating costs, adding a risk discount and offsetting it with expectations for bitcoin-per-share increases.

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While DATs don’t have a fixed lifespan in practice, the executive says this extends rather than changes the model as costs and risks increase over time, while companies that can consistently grow crypto per share can become very valuable.

He also said that larger DATs have structural advantages, including easier access to debt markets, larger pools of crypto for lending, deeper options markets and broader opportunities for mergers, acquisitions or other competitively priced deals. While DATs have been largely parallel over the past six months, Hougan expects greater divergence in the future, with a small number of companies doing well enough to trade at a premium, while many others trade at a discount.

Meanwhile, DAT companies will have invested at least $42.7 billion in crypto acquisitions by 2025, according to CoinGecko’s recent report. It was found that $22.6 billion was deployed in the third quarter alone, making this the strongest quarter ever in terms of accumulation. Altcoin-focused DAT companies accounted for $10.8 billion, or 47.8%, of spending in the third quarter, but Bitcoin-focused companies continued to dominate overall activity.

Since the beginning of 2025, Bitcoin DAT companies have purchased over $30 billion worth of BTC, representing 70.3% of total acquisitions. Ethereum counterparts followed with $7.9 billion in purchases, most of it in August, while SOL, BNB, WLFI and other assets made up 11.2% of annual spending.