$130B Crypto Treasuries Face ETF Shock: Why Bitcoin Treasury Stocks Are Losing Their Premiums

Introduction

Crypto treasury firms are facing a $130 billion “value reckoning” as spot Bitcoin and Ethereum ETFs reshape how investors access digital assets. For years, Digital Asset Treasury (DAT) companies like MicroStrategy (now Strategy) and Metaplanet traded at hefty premiums because they offered one of the few regulated ways to gain Bitcoin exposure via corporate balance sheets. Bitwise CIO Matt Hougan now argues that this premium era is ending: the natural state of a passive Bitcoin treasury stock is a discount to its net crypto holdings due to persistent illiquidity, operating costs, and execution risk. As these “expense and risk” factors compound, investors are increasingly questioning why a dollar of BTC held in a corporate wrapper should be worth more than a dollar of BTC held directly or via a low-fee ETF.

The rapid rise of spot Bitcoin and Ether ETFs has intensified this structural shift in crypto markets. Issuers like BlackRock and Fidelity now provide regulated, highly liquid, low-cost ETFs that track BTC and ETH closely, reducing the need to use treasury-heavy public companies as a proxy for digital asset exposure. ETF experts such as Nate Geraci have labeled these products “DAT killers,” while Bloomberg’s Eric Balchunas notes they offer the same core function as DATs—crypto exposure—“with good tracking” and without corporate overhead. As ETFs capture more institutional flows, many Bitcoin treasury stocks have already suffered steep drawdowns; 10X Research estimates retail investors have lost about $17 billion as markets repriced away what it calls “financial alchemy” driven by aggressive share issuance and speculative premiums.

In this new environment, DATs can only justify a premium if they grow “crypto-per-share” through active strategies rather than simply holding Bitcoin on the balance sheet. Hougan highlights four levers: issuing debt to buy more BTC, lending assets for yield, using options and structured products, and acquiring crypto assets at a discount—tools that favor larger, scalable firms with cheaper access to capital. Bitwise CEO Hunter Horsley expects consolidation as weaker treasuries struggle to counter expense drag, while stronger players evolve into operating companies that buy private crypto businesses and generate real revenue. The core takeaway for investors and corporate treasuries alike is clear: in a market dominated by Bitcoin ETFs and Ethereum ETFs, passive Bitcoin treasury strategies will increasingly trade at discounts, and only active, risk-managed “crypto-per-share” growth models are likely to maintain a valuation edge in the evolving digital asset and ETF landscape.

Background

As spot Bitcoin ETFs and Ethereum ETFs go mainstream, a quiet but important repricing is underway in a $130+ billion corner of the crypto market: digital asset treasuries.

For years, Digital Asset Treasury (DAT) companies—public firms that hold large amounts of Bitcoin or other crypto on their balance sheets—traded at substantial premiums. Investors treated them as a proxy for Bitcoin exposure when direct access was clunky, restricted, or institutionally off-limits.

That market structure has changed. And according to Bitwise CIO Matt Hougan, most of these crypto treasury stocks are now structurally wired to trade at a discount to the value of the coins they hold, not a premium. His framework, first shared publicly in late 2025 and discussed across outlets like CryptoSlate, CryptoNews, and BeInCrypto, offers a useful lens for DeFi and fintech professionals thinking about market structure, product design, or treasury strategy.

This article walks through that shift in clear terms:

• What DATs are and why they once traded at premiums

• Why the rise of spot Bitcoin ETFs and Ethereum ETFs is forcing a repricing

• How “crypto-per-share” has become the key metric, and what levers DATs can realistically pull

• What this means for investors, builders, and risk teams across CeFi, DeFi, and broader fintech

What Are Digital Asset Treasuries—and Why Did They Ever Trade at a Premium?

Digital Asset Treasury (DAT) companies are publicly listed firms whose primary appeal to investors is their crypto balance sheet. Examples include:

• Strategy (formerly MicroStrategy), which holds a large, actively accumulated Bitcoin treasury

• Metaplanet in Japan, which has pivoted its strategy toward Bitcoin holdings

In practice, a DAT is:

A listed equity whose core value proposition is indirect exposure to crypto assets held on its balance sheet.

Historically, these companies could trade at significant premiums to their “look-through” crypto holdings. In other words, the market cap of the stock was greater than the value of the Bitcoin or other coins they owned, even after accounting for debt.

That made sense in a previous market regime:

• Limited regulated access: Before spot Bitcoin ETFs were approved in major markets, many institutions and some retail channels did not have easy, compliant ways to hold BTC or ETH directly.

• Equity-only mandates: Some asset allocators could buy stocks but not crypto, derivatives, or non-equity funds. DATs were a convenient workaround.

• Narrative premium: Investors often priced in a mix of optionality—future BTC accumulation, operating leverage, or strategic pivots—on top of the underlying coins.

In that environment, buying a DAT was, for many, the cleanest way to get Bitcoin exposure via a traditional brokerage account, especially inside existing equity strategies.

Why the Default State Is a Discount: Illiquidity, Expenses, and Execution Risk

Hougan’s core claim, echoed across several analyses of DATs, is that the natural state of a passive crypto treasury is a discount, not a premium. The logic is simple but powerful and rests on three structural drags:

1.  Illiquidity: Indirect Access Has a Cost

When you buy a Bitcoin ETF, you get relatively direct, redeemable exposure to the underlying asset within a regulated wrapper.

When you buy a DAT equity, you get:

• A claim on a corporation

• That owns Bitcoin (or other crypto)

• Which cannot be redeemed by shareholders on demand

Even if the company discloses on-chain addresses and BTC totals, you cannot simply “swap” your share for your slice of the underlying. That friction between ownership and access is economically meaningful.

Hougan and others describe this as illiquidity discount: investors rationally pay less for an asset they can’t directly redeem or access in real time. Analyses summarized by BeInCrypto suggest investors often demand at least a mid-single-digit to low double-digit discount for this kind of structural delay and control risk.

2. Operating Expenses: Ongoing Costs Erode Crypto-Per-Share

Public companies are not free:

• Executive and staff compensation

• Audit and compliance costs

• Legal, regulatory, and governance overhead

• Custody, security, and infrastructure for crypto holdings

All of these roll up into operating expenses, which effectively reduce net asset value over time.

Even a simple thought experiment is telling:

• If a DAT starts with the equivalent of $100 of Bitcoin per share

• And spends $10 per share over time on aggregate expenses

• Then, holding everything else constant, you end up with $90 of Bitcoin per share

That’s a built-in 10% NAV drag, before you even consider market cycles. As CryptoNews summarizes Hougan’s view: expenses are not theoretical; they compound in the wrong direction.

3.  Execution Risk: Management Can Destroy Value

Finally, there’s execution risk—a concept familiar to anyone in venture, DeFi governance, or public markets:

• Management can mistime Bitcoin buys or sells

• They can pursue dilutive equity issuance or expensive debt

• They can mismanage M&A, or take on inappropriate derivatives risk

• They can run afoul of regulators or fail basic risk management

Because these risks are very real and not diversifiable within a single DAT, markets rationally discount the equity. As Hougan has put it in various commentaries:

Most of the reasons a DAT should trade at a discount are certain, while most of the reasons it might deserve a premium are uncertain.

Put together—illiquidity, expenses, and execution risk—you get a strong argument that, absent something special, a DAT “should” trade below the value of its crypto holdings.

The ETF Shock: Bitcoin and Ethereum ETFs as “DAT Killers”

What has changed in the last few years is the competitive landscape for regulated crypto exposure.

With US and other major-jurisdiction approvals of spot Bitcoin ETFs and spot Ethereum ETFs, investors now have products that:

• Hold BTC or ETH directly in trust

• Offer daily creations and redemptions, supporting tight tracking vs spot

• Trade on mainstream exchanges with robust liquidity

• Charge management fees that are often lower than the implicit cost structure of a DAT

• Fit neatly into existing portfolio, risk, and compliance frameworks

ETF experts like Nate Geraci have publicly called spot products “DAT killers”, arguing that they close the regulatory arbitrage that once justified premium pricing for treasury-heavy companies. Bloomberg’s Eric Balchunas has similarly noted that ETFs deliver the same economic function—exposure to Bitcoin or Ether—“with good tracking” and without the overhead and governance complexity of corporate structures.

ETF flow dashboards and analytics from providers such as Farside Investors and other ETF data specialists show that billions of dollars have cycled through spot Bitcoin ETFs since launch, validating the product-market fit of these vehicles for both retail and institutions.

In this world:

• If you want pure Bitcoin exposure, you can simply buy a spot Bitcoin ETF.

• If you want equity-like upside plus Bitcoin, you can buy miners or operating businesses with actual cash flow.

The middle ground—paying a premium for a static or mostly passive Bitcoin balance sheet—has much less justification.

“Crypto-Per-Share” Becomes the Core Metric

Given the structural headwinds and ETF competition, Hougan’s framework shifts the question from:

“Should this DAT trade at a premium to its Bitcoin?”

to:

“What is this firm doing to grow crypto-per-share over time, net of expenses and risk?”

Crypto-per-share is a simple but powerful metric:

• Start with total crypto holdings (e.g., Bitcoin, ETH)

• Adjust for debt and other liabilities

• Divide by the fully diluted number of shares

This is analogous to looking at NAV-per-share for a closed-end fund or the economic value per token for a DeFi protocol treasury.

Only if a DAT can reliably grow this figure over time, in a risk-aware way, can a reasonable premium be justified. Otherwise, the structural forces will push it toward a discount, especially now that Bitcoin ETFs and Ethereum ETFs offer competing exposure.

The Four Main Levers DATs Can Pull

Hougan and subsequent analyses (e.g., BeInCrypto’s breakdown) describe four primary tools DATs can use to increase crypto-per-share:

1. Issuing Debt to Buy More Crypto

This is arguably the most potent lever when executed well:

• Issue debt (bonds or convertible notes) at a fixed interest rate

• Use the proceeds to buy more Bitcoin or ETH

• If the asset appreciates faster than the cost of debt, crypto-per-share rises

This strategy is essentially classic levered beta applied to digital assets. It can be extremely effective in a strong bull market with reasonable credit conditions—MicroStrategy’s earlier cycles are a high-profile example.

However, it comes with serious risk:

• If prices stagnate or fall, leverage amplifies losses

• Refinancing risk emerges if debt matures in a tighter rate environment

• Rating downgrades, margin calls, or covenant breaches can force suboptimal decisions

For risk teams and sophisticated investors, the question becomes: Is this risk-reward superior to just levering a Bitcoin ETF or futures position in a controlled format?

2. Lending Assets for Yield

DATs can lend their Bitcoin or ETH through:

• Institutional lending desks

• Overcollateralized lending platforms

• Repo-like structures

• On-chain DeFi protocols (where mandates and regulation allow)

The upside:

• Incremental yield in-kind (more BTC or ETH) can grow crypto-per-share

• Yields in certain environments can be attractive vs cash

The trade-offs:

• Counterparty risk (CeFi lenders, OTC desks)

• Smart contract and protocol risk (DeFi platforms)

• Liquidity and rehypothecation concerns

• Regulatory and disclosure complexity

For a DeFi-focused or fintech audience, this is where on-chain risk frameworks, proof-of-reserve mechanisms, and transparent collateralization become especially relevant.

3. Using Options and Structured Products

DATs can also deploy options strategies:

• Writing covered calls to generate premium

• Writing puts to potentially acquire more BTC/ETH at lower effective prices

• Engaging in structured products with defined payoff profiles

These strategies can add incremental yield but also:

• Cap upside if calls are called away

• Introduce asymmetric downside if mispriced or poorly hedged

• Require sophisticated risk management and trading infrastructure

From a valuation standpoint, premiums might be justified only if the firm demonstrates consistent, risk-adjusted outperformance, not just occasional wins.

4. Acquiring Assets or Businesses at a Discount

Finally, DATs can grow crypto-per-share via M&A and capital allocation:

• Buying other treasuries or operating businesses at a discount to their underlying crypto

• Conducting share repurchases when their own stock trades at a steep discount to NAV

• Acquiring crypto-native businesses with real cash flow and strategic value

Scale matters here. As Hougan and others emphasize, larger DATs have access to cheaper capital, more deal flow, and better counterparties, giving them a structural advantage in this playbook.

Sector Repricing and the End of “Financial Alchemy”

Recent research cited by outlets like CryptoSlate and 10X Research suggests that:

• Retail investors have lost billions of dollars in aggregate as DAT valuations reset

• A significant portion of prior upside was driven by what some analysts call “financial alchemy”—using repeated equity issuance during hype cycles to appear to grow exposure, until volatility reveals the fragility of the structure

• Performance is now highly dispersed:

  • High-expense, small-scale, or over-levered treasuries have underperformed

  • Firms that genuinely grow crypto-per-share and manage risk have been relatively more resilient

In other words, the market is moving from a single, hype-driven trade (“buy any Bitcoin treasury stock”) to a more discriminating, fundamentals-driven regime.

Implications for DeFi, Fintech, and Treasury Professionals

For a DeFi and fintech-oriented audience, this shift has several useful takeaways:

1. Market Structure Matters

The emergence of spot Bitcoin and Ethereum ETFs fundamentally changes the competitive set for any product that offers “BTC exposure in a wrapper,” whether it’s a DAT, a structured note, or a tokenized fund.

2. Crypto-Per-Share Is a Useful Lens On-Chain Too

The same logic applies to DAO treasuries, tokenized funds, and protocol-controlled value:

• What is the asset-per-token today?

• How do expenses, emissions, and governance decisions affect that over time?

• Are you structurally in premium or discount territory vs intrinsic value?

3. Premiums Require Real, Repeatable Edges

 Whether on-chain or off-chain, to justify a premium you need:

• Superior access to capital or deal flow

• Demonstrable risk management and execution

• A clear strategy to grow asset-per-unit (crypto-per-share, NAV-per-token, etc.)

4. Transparency and Cost Discipline Win in the Long Run

ETFs gained adoption partly by being:

• Transparent in holdings

• Clear on fees

• Simple in structure

5. DATs, DAOs, and other vehicles that want to compete for capital in this environment need to offer equally clear disclosure, governance, and cost profiles.

Conclusion: “Just Holding Bitcoin” Is No Longer a Business Model

The core message from Hougan’s framework and the emerging data is straightforward:

• In a world with liquid, low-fee spot Bitcoin ETFs and Ethereum ETFs, simply sitting on a pile of BTC or ETH inside a corporate wrapper is not enough.

• Illiquidity, expenses, and execution risk mean that the default valuation for passive crypto treasuries is a discount, not a premium.

• Only those DATs that can consistently grow crypto-per-share, manage risk thoughtfully, and evolve into true operating businesses are likely to maintain or earn premium valuations over time.

For investors, that suggests treating crypto treasury stocks less like high-beta Bitcoin trades and more like special situations requiring bottom-up analysis.

For DeFi and fintech builders, the lesson is equally important: if your product’s value proposition is “exposure to X,” expect to be compared—on cost, transparency, and risk—to the cleanest vehicles in the market, whether they are ETFs, on-chain index products, or tokenized funds.

In this new regime, capital is increasingly rewarding clarity, efficiency, and genuine value creation—and punishing structures that rely on opacity, hype, or financial alchemy.