Bitwise Chief Investment Officer Matt Hougan has offered a new perspective on how digital asset treasury firms (DATs) are valued, stating that the current insights often misinterpret the appropriate pricing based on their held assets.

In a series of discussions, Hougan emphasized the importance of understanding what a DAT’s valuation could be if it were to have a predetermined closure date.

Illiquidity, Expenses, and Risk

He explained that if a Bitcoin-centered DAT announced immediate shutdown and distribution of its holdings, it would trade precisely at its Bitcoin valuation, resulting in a market NAV (mNAV) of 1.0. However, if the liquidation period were extended to one year, this could result in a valuation above or below the fundamental asset’s worth.

Hougan identified three critical elements that would lead to a discount on mNAV: illiquidity, expenses, and overall risk. Illiquidity reflects the lesser price investors would likely accept today for future Bitcoin payouts, which Hougan estimates could range from 5-10%. Similarly, operational expenses reduce overall investor value. For instance, if a DAT holds $100 in BTC yet pays its executives $10 annually per share, it would justify a corresponding 10% devaluation. Moreover, the risk associated with operational errors must also be integrated into pricing considerations.

Conversely, Hougan noted that DATs may command a premium if they are effectively increasing their crypto per share. He clarified that in the U.S., this is the sole factor supporting such premiums. He mentioned four strategies that DATs can employ to enhance value per share: issuing debt denominated in USD to purchase crypto, lending crypto for interest, utilizing derivatives like writing call options for additional income, and securing crypto at a discount.

Discounted acquisitions can transpire through various means, such as acquiring locked assets from foundations seeking liquidity, repurchasing shares from another DAT trading below its asset value, or purchasing cash-generating businesses and channeling profits into crypto.

The “High Hurdle”

Hougan pointed out that while discount factors are relatively stable, factors leading to premiums tend to be more unpredictable. This establishes a high hurdle for many DATs, implying most companies will trade at a discount, with only a limited selection of robust performers achieving a premium.

He illustrated this by discussing a hypothetical Bitcoin DAT set for liquidation in 12 months, stating that reasonable value estimation should account for expenses, add a risk discount, and consider potential growth in Bitcoin per share.

Despite not having fixed lifespans in practice, Hougan believes this expands rather than alters the valuation model, as expenses and risks accumulate over time. Firms consistently enhancing their crypto per share can achieve significant value.

He also indicated that larger DATs enjoy structural benefits such as better access to debt markets, larger lending pools, deeper options markets, and broader acquisition opportunities. While all DATs have generally moved together over the last six months, Hougan anticipates more significant divergence in the future, with a handful of firms surviving well enough to trade at a premium while others will see discounts.

Market Statistics

According to a recent report by CoinGecko, DAT companies have collectively poured at least $42.7 billion into crypto acquisitions in 2025. Among this, $22.6 billion was spent in the third quarter alone, making it the most substantial quarter on record for accumulation. DATs focusing on altcoins represented $10.8 billion (nearly 47.8%) of Q3 expenditures, but Bitcoin-focused entities still led overall activity.

Since early 2025, Bitcoin DAT companies have acquired over $30 billion in BTC, constituting 70.3% of total acquisitions, while their Ethereum counterparts have invested $7.9 billion, primarily during August. Other cryptocurrencies such as SOL, BNB, WLFI, and others accounted for the remaining 11.2% of annual spending.