Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Digital Asset Treasury (DAT) stocks have experienced a sharp decline, with some plummeting more than 50% from their 2025 peaks and now trading near or below the value of their underlying crypto holdings. This significant sell-off has prompted investors and analysts to question whether the market is experiencing a justified collapse or an oversold condition that could present a future opportunity.
Market Underperformance and Valuation Compression
While Bitcoin (BTC) has fallen approximately 20% from its 2025 all-time high, DAT stocks have seen even steeper drops. Strategy’s stock is down 50% from its July peak, while Metaplanet and SharpLink have recorded declines of nearly 80% and 90%, respectively. This rapid depreciation has compressed their market-net-asset-value (mNAV) close to or below 1, indicating that their market capitalization is approaching or falling below the value of their crypto assets.
Yaroslav Patsira, Fractional Director at CEX.IO, noted that when DAT stocks trade below their crypto holdings, the market is no longer rewarding them for accumulation. He explained that this situation creates real pressure, potentially forcing companies to sell some of their digital assets to cover operational costs.
Divergent Performance and Risk Assessment
Experts are observing a divergence in performance among DATs. Fakhul Miah, Managing Director of Gomining Institutional, suggests that “Bitcoin-focused treasuries with cleaner balance sheets are holding up better than multi-asset DATs,” many of which pursue higher-risk tokens. He believes that for stronger Bitcoin-centric names, the current downturn appears more oversold than a definitive end to their growth.
Despite the recent slump, a longer-term perspective reveals that some DATs have still significantly outperformed Bitcoin year-to-date. Galaxy Digital is up 73.4% and SharpLink has risen 43.2%, far exceeding Bitcoin’s 8.6% gain. This suggests that the recent correction might be a sharp, albeit painful, adjustment within a broader bullish trend rather than its conclusion, underscoring the high-risk, high-reward nature of these high-beta proxies for crypto exposure.
Strategy and Recovery Outlook
Strategy, known for its substantial holding of 641,692 BTC and a consistent strategy of not selling its Bitcoin, stands out as a pure, long-term Bitcoin proxy. While its year-to-date performance is negative at -25%, it holds over $18 billion in unrealized gains, making its position less severe than some peers.
The crucial factor for a recovery in DAT stocks remains a rebound in Bitcoin’s price. Miah highlighted that the return of delayed U.S. economic data after the government shutdown is key. He added that softer inflation figures and clearer indications from the Federal Reserve regarding potential rate cuts in December could alleviate pressure on the crypto market, thereby catalyzing a DAT stock recovery. Patsira echoed this sentiment, emphasizing that DATs will likely follow if Bitcoin reestablishes bullish momentum.
