Digital-asset treasury company bubble collapse diagnosed… CoinShares warns

JH Kim

Summary

CoinShares diagnosed that the bubble has already burst as the mNAV of some digital-asset treasury companies (DAT) plunged.
It said that valuation premiums that had overheated solely due to holding digital assets quickly disappeared due to changes in market conditions.
It said DAT share price volatility and mNAV declines could lead to weakened investment incentives and increased impact on corporate value.

CoinShares, a virtual asset (cryptocurrency) asset manager, diagnosed that the digital asset treasury company (DAT) bubble has already burst. On the 5th (local time), according to virtual-asset specialist media CoinDesk, CoinShares said the ratio of held asset value to net asset value (mNAV) for some DAT listings fell from 3–10 times this summer to 1 or less.

CoinShares said that during the rapid expansion of the DAT sector, valuations overheated solely on the basis of digital asset holding strategies, regardless of corporate performance. It explained that, especially as market environment changes dampened investor sentiment, premiums quickly disappeared and cases emerged where mNAV normalized or moved into discount territory in a short period.

The outlet also emphasized that a "next-generation DAT" will need fundamentals and a credible business model to survive. It also stated that strict governance and realistic expectations must accompany this, and that digital assets should be used as a tool to achieve business objectives rather than being the entirety of a company.

Market observers say that the larger the share price volatility of DAT companies, the more financing conditions and the sustainability of hoarding strategies may be tested. If mNAV falls below 1x, new investment inflows may slow, and changes in the value of held assets may have a greater impact on corporate value.

CoinShares' diagnosis suggests that the DAT sector needs to be restructured away from a simple holding strategy toward a form that has a business foundation and risk management systems. At the same time, it is interpreted as a warning that if the phenomenon of digital asset holdings being overvalued as a key driver of corporate value repeats, market instability could expand.