Most cryptocurrency custodians trade at a discount – here’s why

Bitwise investment director Matt Hogan highlights the common mispricing in digital treasuries (DAT). He urges investors to consider valuation beyond simple cryptocurrency as these companies navigate complex financial dynamics.

Digital treasury firms now manage over $130 billion in digital assets, serving as a vital link between traditional capital markets and direct cryptocurrency exposure. Their unique position creates new valuation challenges that set them apart from other investment vehicles.

Sponsored

Sponsored

Bitwise reveals 3 ways to evaluate DATs: everything you need to know

Bitwise Investment Director Matt Hogan warns that most digital treasurers (DAT) are mispriced. While many of them trade at a discount to their assets, some may trade at a premium through increased cryptocurrency per share.

Hogan’s framework offers investors a clear way to separate the winners from the laggards.

1 / I see a lot of bad analysis of DATs, or digital asset treasure companies. In particular, I see a lot of bad takes if they have to trade at, above, or below the value of the assets they hold (the so-called “mNAV”).

Here’s how I approach it.

– Matt Hougan (@Matt_Hougan) November 23, 2025

Why do most of the DAT trade at a discount?

Hogan highlights three main reasons why digital treasury (DAT) companies usually fail:

• Limited liquidity: Investors require a discount of 5-10% if the assets are not immediately available.
• Expenses: Operating costs and executive compensation directly reduce value.

Sponsored

Sponsored

For example, $100 in Bitcoin minus $10 in fees per share equals a 10% discount.

• Risk: Errors, market changes, or execution errors can lower the ratings further.

“… most of the reasons you trade at a discount are certain, and most of the reasons you trade at a premium are uncertain,” says Hogan. He says.

This means that most digital treasure companies (DATs). It exceeds below its net asset value (mNAV)..

Sponsored

Sponsored

How DATs can be exchanged at a premium

Some digital treasurers (DAT) overcome by increasing cryptocurrency per share, with Hogan identifying four main strategies:

• Issuing Debt: Borrowing USD to buy cryptocurrency can increase your stake if prices rise.
• Cryptocurrency Lending: Earning interest multiplies the cryptocurrency held by the company.
• Use of Derivatives: Writing options or similar strategies generates additional assets, although this may limit the increase.
• Buying cryptocurrency at a discount: Buying undervalued assets, buying stocks, or buying ongoing businesses can efficiently increase your cryptocurrency per share.

explain Official Bitwise That size matters, noting that larger DATs can access debt more easily, lend more cryptocurrencies, and take advantage of merger and acquisition opportunities. Size is a structural characteristic.

Sponsored

Sponsored

Market differentiation is coming

DATs have historically moved together, but Hogan expects the discrepancy to increase.

• Excellent DAT: good execution, increased tokens per share, leveraged volume.
• Discounted DATs: Having difficulties with expenses, risks, or small size.

Investors can use the Hogan approach, calculating expenses, risks and growth potential, to determine… Fair value.

Investors should also monitor:

• That DAT continuously increases the cryptocurrencies per share.
• How size gives some DATs a long-term advantage.
• market movements that create the opportunity to buy DAT that are undervalued.

As the market prepares for further differentiation, Hogan’s framework can understand and separate the winners from the losers amid the growth of the digital asset treasury space.