Tom Lee "Digital Asset Treasury companies' stock bubble has already burst"

The stocks of companies following the 'Digital Asset Treasury' (DAT) strategy, which accumulate cryptocurrencies, are trading below the value of their held assets (NAV), and the market has pointed out that the bubble in that model has already burst.

According to crypto-focused media Forklog on the 18th, Tom Lee, chairman of Bitmain, the world's largest holder of Ethereum (ETH), said in an interview with Fortune, "The stocks of DAT strategy companies are trading below their intrinsic value (NAV). The bubble has already burst." He also said, "If this is not a bubble burst, then what is a bubble burst?"

DAT refers to a business model that purchases and holds large amounts of a specific crypto asset such as Bitcoin or Dogecoin and offers exposure to it to investors in the form of stock. A representative example is Strategy (formerly MicroStrategy), which began large-scale Bitcoin purchases in 2020 to provide investors with Bitcoin exposure. Recently, this strategy has rapidly expanded as it has been extended to holdings such as Ethereum.

However, Lee did not believe that all DATs would succeed. He said, "Many DATs that include various altcoins in addition to Ethereum are emerging, but it will be difficult to handle actual market demand," judging that some projects have entered an oversupplied state.

Earlier, Lee first encountered Bitcoin in 2012 while serving as chief strategist at J.P. Morgan, and later founded Fundstrat, building a reputation as a Bitcoin bull. In June, he was appointed chairman of the listed mining company Bitmain and is reorganizing the company into an 'Ethereum treasury company.' Lee evaluated that Ethereum remains a blockchain that financial institutions should pay attention to in terms of future upgrades, staking reward structure, and the possibility of inclusion in major indexes.

Meanwhile, Bitmain holds about 3 million Ethereum (ETH), which is about 2.5% of the total supply. Its market capitalization exceeds $15 billion (about KRW 21.3 trillion). Bitmain plans to increase its holding ratio to 5%.