mNAV's Shortcomings Expose Bitcoin Firms to Hidden Liabilities

NYDIG, a prominent Bitcoin financial services firm, has called for the retirement of the market net asset value (mNAV) metric, which it argues misleads investors by failing to account for the full financial complexity of Bitcoin treasury companies. According to Greg Cipolaro, NYDIG’s global head of research, the widely used mNAV—calculated as a company’s market capitalization divided by its crypto holdings—is “woefully inadequate” for valuing firms that combine Bitcoin accumulation with operational businesses or complex capital structuresNYDIG Research, ^[1]. The firm emphasizes that mNAV often relies on “assumed shares outstanding,” which may include unconverted convertible debt, creating liabilities that are not reflected in the metricCoindesk, ^[2].

The critique is underscored by recent market trends. As of September 2025, over 100 publicly traded companies hold Bitcoin, with many trading below their mNAV. For instance, Semler Scientific (SMLR) and Trump Media (DJT) had equity premiums to NAV of -10% and -16%, respectively, despite mNAV ratios above 1.1. This discrepancy highlights mNAV’s failure to capture the value of operating businesses or the risks posed by convertible debtGate, ^[3]. NYDIG argues that investors should instead use a combination of metrics, including net asset value (NAV), mNAV adjusted for enterprise value, and equity premiums, to form a more comprehensive viewNYDIG, ^[4].

The limitations of mNAV have become increasingly evident as the sector matures. Standard Chartered analysts note that compressed mNAVs are driving consolidation, with larger players like Strategy (MSTR) and Bitmine (BMNR) poised to acquire weaker firms trading at discountsCointelegraph, ^[5]. A recent merger between Strive and Semler Scientific, creating a combined entity holding over 10,900 BTC, exemplifies this trend. NYDIG warns that treating convertible debt as equity in mNAV calculations masks cash liabilities and dilutive risks, potentially leading to financial instabilityBitnewsbot, ^[6].

The industry’s reliance on mNAV has also exposed companies to volatility. For example, MicroStrategy (MSTR) saw its stock rise nearly 5% as Bitcoin hit $108,500, while SMLR and DJT remained stagnantCoincentral, ^[7]. This divergence underscores the need for a valuation framework that accounts for operational performance and capital structure. NYDIG advocates for a focus on “Bitcoin per share growth” and sustainable yield generation, metrics that reflect a company’s ability to create value beyond mere asset accumulationNYDIG, ^[8].

Regulatory and market pressures are accelerating this shift. The U.S. SEC and Finra are scrutinizing abnormal stock price movements in Bitcoin treasury firms, while investor caution has intensified. Companies that fail to demonstrate robust operational strategies or disciplined debt management are at higher risk of insolvencyFinancialContent, ^[9]. NYDIG’s analysis suggests that only a few firms will sustain mNAV premiums through strong leadership, innovation, and macroeconomic awarenessCoindesk, ^[10].

The reevaluation of valuation paradigms signals a broader maturation of the crypto sector. Investors are increasingly prioritizing fundamentals over speculative metrics, pushing companies to articulate clear strategies for value creation. As Cipolaro notes, the future of Bitcoin treasury firms will hinge on their ability to navigate capital structures, leverage operational revenue, and adapt to evolving market demandsNYDIG, ^[11].