Bitcoin News Today: Crypto Treasury Firms Trade at 200% to 500% Premium Over mNAV

NASDAQ-listed crypto treasury firms are experiencing a surge in valuations, with shares trading at premiums of 2x to 5x their modified net asset value (mNAV), raising concerns over the sustainability of the model [1]. These firms often emerge through reverse takeovers of dormant NASDAQ companies or SPAC mergers, allowing early investors—known as PIPE investors—to purchase shares at or near the value of the cryptocurrency to be held in the treasury. Once listed, the stock frequently experiences a sharp price increase, creating an immediate profit for insiders [1].

The structure supports a self-reinforcing cycle: the firm issues more shares at the elevated price, uses the capital to acquire additional crypto assets, and thereby drives up both the share price and the underlying asset value [1]. BitMEX Research has labeled this a “heads you win, tails you don’t lose” model, emphasizing how early investors benefit from the initial premium while long-term investors risk value erosion over time due to high advisory fees and collapsing premiums [1].

This strategy mirrors speculative frenzies seen in the crypto market, including the 2017 ICO boom and the 2021 NFT craze. If these firms gain inclusion in major financial indexes, they could attract passive fund purchases from institutional players such as Vanguard or State Street. For example, BitMEX notes that Vanguard already owns 7% of MicroStrategy’s shares across 66 funds, despite a history of skepticism toward Bitcoin [1].

A key element of the model is the role of “strategic advisors,” who often receive setup fees of 1%–8% and ongoing incentives tied to market performance. These fees, while aligned with short-term growth, may become a drag on long-term value, particularly during market downturns. This parallels the experience of Grayscale’s Bitcoin Trust (GBTC), which suffered $23.72 billion in outflows after 2024 as lower-cost spot Bitcoin ETFs entered the market [1].

According to BitMEX Research, many of these crypto treasury firms are at risk of eventually trading at a discount to mNAV, effectively becoming “zombie” companies that continue to pay high fees despite declining value [1]. However, a few firms may grow large enough to secure passive fund ownership before premiums collapse. The report concludes with a recommendation for investors to consider cost-effective alternatives, such as Bitcoin ETFs, rather than exposing themselves to the risks of the current treasury company model [1].

Source:

[1] BitMEX Research - Crypto Treasury Company Bubble Warning

https://coinedition.com/bitmex-research-crypto-treasury-company-bubble-warning/