The landscape for digital asset treasury companies (DATs) is shifting dramatically, with Coinbase Institutional highlighting the end of easy gains in its recent Monthly Outlook report. This change has been attributed to a combination of heightened competition, regulatory challenges, and execution risks that have begun to compress market net asset values (mNAV).
According to the report, authored by David Duong and Colin Basco, the industry is transitioning into a “player-versus-player” competitive phase, marking a critical inflection point for DATs. Early adopters like Michael Saylor’s strategy have enjoyed advantages, receiving substantial premiums on their mNAV. However, the report suggests that the scarcity premium that once favored these first movers has dissipated, indicating that only the most strategically disciplined companies will likely endure in this evolving market.
The analysis emphasizes that many ETH treasury companies are now trading below their mNAV, meaning their market capitalizations do not reflect the actual value of their crypto assets. Among the 17 public firms holding ETH treasuries, several, including SharpLink and The Ether Machine, have reported a negative mNAV. This situation raises concerns about the sustainability of these companies in a competitive environment.
Despite these challenges, some firms are taking bold steps to fortify their positions. Reports indicate that SharpLink has transferred over $1 billion in stablecoins to Galaxy Digital, which then moved the funds to Binance with the intent of bolstering their ETH holdings. This move suggests a strategic pivot in which companies are choosing to double down on their investments despite negative market indicators.
Coinbase Institutional underscores that a company’s longevity will hinge on strategic discipline. Mert Mumtaz, CEO and co-founder of blockchain RPC platform Helius, has also shared insights on how treasury companies might innovate to maintain a competitive edge, proposing that they could issue stablecoins that earn yield, which would then be automatically reinvested to accumulate more treasury assets in a continuous cycle of demand generation.
The concerns surrounding DATs are not isolated to Coinbase. Galaxy Digital has similarly warned that the influx of companies adding crypto to their balance sheets could escalate market risks, drawing parallels to the investment trust boom of the 1920s, which played a role in the catastrophic market crash of 1929. As the digital asset landscape evolves, the survival of many treasury companies may depend on their ability to navigate this new competitive reality with careful strategy and innovation.
