The rapid rise of crypto treasury companies could be facing its real test soon.
In its annual report, Galaxy Digital warned that five or more Digital Asset Treasury companies (DATs) could soon be forced to sell assets, merge with larger players, or shut down altogether as market conditions tighten.
The report points to growing pressure on firms that rushed into crypto treasuries without solid long-term strategies.
Digital Asset Treasuries – publicly listed companies that hold assets like Bitcoin or Ethereum on their balance sheets – surged earlier this year as crypto prices climbed and financing became easier. But that momentum is fading fast.
mNAV Slips Below Key Levels
Galaxy highlighted a sharp shift in market-to-net asset value (mNAV), a key metric that compares a company’s market value to the value of its crypto holdings. Many Bitcoin, Ethereum, and Solana-focused DATs are now trading at mNAVs below 1, meaning investors value these companies at less than their underlying assets.
“After the rush of companies across disparate business lines converting into DATs to capitalize on market financing conditions, the next phase will separate durable DATs from those without coherent strategies or asset management capabilities,” Galaxy’s Jianing Wu said.
Once mNAV falls below 1, issuing new shares becomes dilutive, limiting a company’s ability to raise capital and expand its crypto holdings.
A Crowded Trade Faces Reality
The DAT boom was fueled by bullish markets and friendlier regulation in the U.S., even as investors gained easier access to crypto through ETFs. Many DATs aimed to outperform spot crypto prices using tools like equity issuance and staking strategies.
But as prices decline, those models are under strain.
“The viability of DATCOs is closely tied to the persistence of an equity premium to NAV,” Macquarie analysts warned. “If this premium erodes or reverses to a discount, the model faces significant challenges”
Only the Strongest May Survive
Galaxy suggests that firms with scale, strong capital structures, and liquidity planning – such as Strategy or Japan-based Metaplanet – may weather the downturn. Others, especially late entrants without clear planning, may not.
For now, DATs hold less than 1% of the total crypto market. Still, Galaxy’s message is clear: the easy phase of the crypto treasury trade is over, and the next chapter will be about discipline, not hype.
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