Bitwise Chief Investment Officer Matt Hougan has detailed the criteria that distinguish high-performing Digital Asset Treasuries (DATs) from underperformers, emphasizing that only firms executing complex crypto strategies deserve to trade at a market premium. Hougan explained that following recent sector-wide revaluations, most DATs now trade near their market net asset values (NAV), with ratios that once exceeded 25 converging toward 1.0.
Hougan stated that passive DATs merely holding crypto assets without innovation are likely to trade below their underlying value, as comparable exposure is available through ETFs. He highlighted that investors must ask, "Are they doing something hard?" to evaluate a DAT's worth. Active strategies such as writing covered calls, participating in decentralized finance (DeFi), and strategic lending require skill and can enhance returns if managed effectively.
MicroStrategy, rebranded as Strategy, was cited as a prime example of a DAT leveraging complex corporate financing, with $66.22 billion in Bitcoin holdings and $8 billion in debt. The firm uses tools like convertible debt and preferred shares to expand its Bitcoin position, a approach Hougan described as challenging but potentially justifying a premium. He warned that "lazy approaches" will lead to discounted trading, while disciplined execution and innovation define successful DATs.
Artemis data confirms DAT valuations have compressed sharply, reflecting a more realistic market environment. Hougan concluded that only companies "doing hard things well" will sustain investor confidence and premiums in this tightening phase.
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