DATs' Death Spiral Mirrors 2008 CDOs as Premiums Crumble

Digital asset treasury (DAT) companies are experiencing a sharp decline in premiums as market net asset values (mNAVs) compress under investor pressure and saturated strategies, according to recent analyses. The mNAV, a metric measuring the ratio of a firm’s enterprise value to the value of its cryptocurrency holdings, has fallen below critical thresholds for several high-profile DATs, limiting their ability to raise capital for further acquisitions. This trend, observed by Standard Chartered and NYDIG, signals growing risks for smaller players and potential industry consolidation .

The compression of mNAVs has been driven by multiple factors, including market saturation, investor caution, and the rapid proliferation of similar strategies. NYDIG’s global head of research, Greg Cipolaro, noted that over 89 companies have replicated the playbook pioneered by Strategy (MSTR), which first pivoted to Bitcoin treasury accumulation in 2020. As the sector expands, differentiation has become increasingly elusive, leading to weaker premiums and reduced investor confidence. Cipolaro emphasized that DATs must adopt proactive measures, such as stock buybacks, to stabilize share prices amid the tightening market .

Data from NYDIG highlights the slowing pace of Bitcoin accumulation by DATs. Holdings peaked at 840,000 BTC, but average purchase sizes have declined significantly, dropping to 1,200 BTC in August from a peak of 14,000 BTC in 2025. This slowdown reflects broader market dynamics, including profit-taking by investors and shifting corporate strategies. The shrinking gap between stock prices and underlying crypto holdings further exacerbates the challenge for DATs to maintain their value proposition .

Standard Chartered analysts warned that the mNAV collapse could accelerate consolidation, favoring larger firms with access to low-cost funding and staking yields. Ethereum-focused DATs, such as Bitmine (BMNR), are positioned to outperform Bitcoin-centric peers due to their ability to generate additional returns through staking. In contrast, Bitcoin-only strategies face structural headwinds, with the bank projecting a shift toward coin rotation rather than net new buying in the sector .

The risks for DATs extend beyond mNAV compression. Breed VC highlighted the potential for a “death spiral,” where depressed stock prices lead to dilutive capital raises and further downward pressure. This scenario is compounded by regulatory uncertainties and the lack of sustainable business models for firms that have abandoned traditional operations to focus solely on crypto treasuries. Josip Rupena, CEO of crypto lending firm Milo, drew parallels between DAT strategies and pre-2008 collateralized debt obligations, warning of opaque risk exposures for investors .

Despite these challenges, some analysts remain cautiously optimistic. The weakening U.S. dollar and anticipated Federal Reserve rate cuts could provide tailwinds for Bitcoin and DATs, according to Ash Crypto. However, short-term volatility remains a concern, with Bitcoin recently trading below $105,000 after a 25-basis-point rate cut by the Fed. Institutional outflows from Bitcoin ETFs in August further underscore the fragility of current market sentiment .

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