Greg Cipolaro said that buyer’s price for “Digital Asset Treasury” businesses has been falling, even though bitcoin hit a new all-time high in the middle of August. Public companies holding bitcoin on their balance sheets are known as DATs. The premium is calculated by taking their share price and subtracting their NAV per bitcoin share. The group’s previously high premium has significantly diminished, potentially indicating a broader macro-signal for Bitcoin’s cycle instead of being a unique occurrence related to the company.
Cipolaro attributes the premium squeeze to investor anxiety ahead of a significant supply unlocking, changes in the business objectives of the DAT management team, noticeable increases in share issuance, profit-taking after strong performance, and a lack of effective corporate treasury strategy differentiation. Despite bitcoin’s August record, Digital Asset Treasury premiums are declining at the major bellwethers. This as a structural reset rather than an emotional surge. The supply calendar is noteworthy. There could be a rise in selling pressure if the unlock prices drop. Recent fundraising prices signal potential danger. The stock of Twenty One is below its June $21 PIPE (but above its April $10), while that of Nakamoto is below a $5 further PIPE (but above its $1.12). ProCap/Columbus Capital is slightly above its SPAC and preferred equity increase price, while Bitcoin Standard Treasury Co./Cantor Equity Partners is just above its PIPE. Dropping beneath anchor prices could squeeze investors and encourage near-water holders to sell after registration.
Buyback authorizations are rare among significant bitcoin treasuries. Empery Digital stands out as a program-traded entity, currently positioned at 24% below NAV. Nakamoto seeks a $5 billion at-the-market stock offering, typically depending on the premium instead of safeguarding it. Since accretion is a relative premium, an acquirer selling at a higher NAV premium than a target may buy more bitcoin per share even without discounting the target. This suggests that consolidators will seek elevated premiums and engage in substantial transactions. The sole historical parallel for this upcoming signal, significant for those monitoring the bitcoin cycle. Before bitcoin’s April 2021 intermediate high around 64,000 and November 2021 top around 69,000, MicroStrategy’s premium over NAV peaked in February 2021. MicroStrategy’s premium reached its highest point in November 2024. Bitcoin has seen a significant drop in recent weeks as US markets have remained stagnant.
Research firm sidesteps difficult decision. However, supply, issuance, and strategy convergence are squeezing out a previously thriving premium regime for bitcoin treasuries; management teams may need to transition from opportunistic equity taps to defensive buybacks; and if history is any guide, MicroStrategy’s premium—reaching its peak months before bitcoin’s ultimate highs—may once again hint at our position in the cycle.