Digital Asset Treasuries Are Collapsing: Lost Confidence Triggers Market Sell-Off

The financial health of Digital Asset Treasury (DAT) firms, which constituted a major source of crypto market buying since the second quarter, is rapidly deteriorating.

Data released Wednesday by the on-chain data platform Artemis indicates that the market premium for these crypto-holding entities has largely evaporated. According to Artemis’s ‘mNAV by Digital Asset Treasury’ metric, the Market Net Asset Value (mNAV) of DAT firms, which once exceeded 25, is now converging toward 1.0.

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mNAV Ratio Plummets Toward Zero

The mNAV ratio is a critical valuation metric calculated by dividing a firm’s market capitalization by the net asset value (NAV) of its digital holdings. An mNAV greater than 1 signifies that the market assigns a premium to the company’s stock.

This means the market is recognizing its operating ability or future growth potential beyond its current crypto portfolio value. Conversely, an mNAV below 1 suggests the stock is undervalued, signaling low investor confidence.

The trend over the last six months has been sharp. Between May and June of this year, average mNAV for major DAT firms hovered between 1.9 and 2.0, even for conservative assets like Bitcoin (BTC).

However, this premium has severely diminished. As of Tuesday, the mNAV for BTC and ETH DATs is 1.1, while SOL DATs are 1.0. Even the outlier HYPE DATs have fallen to 2.1. Essentially, the premium once paid for gaining crypto exposure via DAT stocks has almost disappeared.

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The resulting lack of confidence is visible in corporate balance sheets. The total amount of BTC held by DAT firms peaked at $92.6 billion on October 6 but has since fallen to $78.1 billion as of Wednesday. Similarly, ETH holdings dropped from a pe