Which is more profitable — token or shares of a cryptocurrency fund: conclusions from DWF Ventures

DWF Ventures compared which brought better results to investors in most cases — a token or shares of a cryptocurrency fund, and concluded that among the 20 largest digital asset treasuries, only 4 companies are trading above the value of the crypto assets on their balance sheets.

Digital asset treasuries, or DAT, are public companies whose strategy revolves around buying and holding cryptocurrencies. According to DWF Ventures, since their inception, most large DATs have underperformed the tokens that lie in their reserves.

• Only 4 out of the 20 largest cryptocurrency treasury companies are trading above the value of their assets.
• Since July, shares of two such companies have gained over 30% compared to the corresponding tokens, but this effect is still limited to a short period.
• DWF Ventures pointed to factors that could create pressure on Strategy and potentially push the company to sell Bitcoin.

Why DAT shares have lost some attractiveness

The key indicator for evaluating such companies is mNAV, which is the ratio of the company's market value to the net value of its assets. If mNAV is below 1, shares are trading at a discount to the value of the cryptocurrency reserves.

According to DWF Ventures, the best indicator among the largest DATs is Bit Digital at 1.49. Next are Strive with an mNAV of 1.21, Hyperliquid Strategies at 1.17, and BitMine at 1.02.

Strategy, the largest corporate holder of Bitcoin, is estimated by DWF Ventures to be at 0.97. The lowest indicator in the sample is SovereignAI at 0.22. At the same time, DWF Ventures emphasized that when calculating mNAV, debt obligations and preferred shares were not taken into account.

Top-20 cryptocurrency treasuries by mNAV. Source: X/DWF Ventures.

DWF Ventures links the decline in valuations to the disappearance of the so-called access premium. Previously, institutional investors were often willing to pay more for DAT shares because regulated entities could not directly hold cryptocurrency.

Now such investors have more tools: ETFs, regulated private funds, and custodial infrastructure for direct ownership of digital assets. This has reduced the need to buy shares of treasury companies at a premium.

<When the SEC proposed to expedite the ETF listing process by more than 75%, the "access premium" has noticeably decreased in recent years. Institutional buyers now have many more options — ETFs, regulated private funds, and custodial infrastructure for direct investment, which was not available before>, the report states.

In the short term, shares may outperform tokens, but the picture is ambiguous

DWF Ventures notes that over the long term, investors have often found it more profitable to hold the token itself rather than shares of the company that accumulates it. Only a few DATs have managed to outperform the underlying asset, and the advantage has been small and did not compensate for the associated risks.

On a three-month horizon, the situation looks different. Since July, shares of individual treasury companies have outperformed the corresponding tokens by 15-40%, and their mNAV has recovered from the range of 0.5x-0.8x to 0.7x-1.0x.

Hyperliquid Strategies, associated with Hyperliquid and the HYPE token, showed a result 31% better than HYPE itself. Cypherpunk Technologies, acting as the treasury for Zcash, outperformed ZEC by 38%.

At the same time, the number of tokens per share has hardly changed. Therefore, DWF Ventures explains this growth primarily by changes in market sentiment. Beyond the three-month period, according to the company, the token itself still looks like a more profitable option.

Why capital structure is becoming more important

DWF Ventures expects that in the future, investors will pay closer attention not only to the size of crypto reserves but also to the composition of boards of directors and the capital structure of DATs.

As an example, the company cites Strategy. According to DWF Ventures, in this structure, the interests of debt holders are prioritized, and there are fixed dividend obligations on preferred securities.

Analysts believe that such payments could lead to Bitcoin sales and dilution of ordinary shareholders' stakes. If investor confidence weakens, the mNAV of Strategy, according to DWF Ventures, risks entering a downward spiral.

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