Bitwise CIO: Evaluating DAT Companies with mNAV is Not Accurate, Future Trends will Show Divergence

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On November 24th, Matt Hougan, the Chief Investment Officer of Bitwise, stated that evaluating DAT companies based on mNAV is not accurate. This is because this valuation method does not take into account the lifecycle of a public company. "Imagine you have a bitcoin DAT that announces it will shut down this afternoon and distribute bitcoin to investors. Its trading price would be exactly equal to the value of its bitcoin (mNAV equals 1.0)." Matt Hougan's analysis indicates that there are three main reasons for a DAT's trading price discount: lack of liquidity, high fees, and high risk. The only reason for a DAT to trade at a premium is whether it increases the cryptocurrency value per share (limited to the United States). Most of the reasons for a DAT trading at a discount are deterministic, while most of the reasons for it to trade at a premium are uncertain. Therefore, most DATs will trade at a discount, with only a few exceptional companies trading at a premium. Over the past six months, DAT prices have fluctuated in a similar manner. Looking ahead, the differences in their prices will become more pronounced. A few DATs are performing well and trading at a premium, while many DATs are underperforming and trading at a discount.

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