Easy gains are gone for crypto treasury companies, and only those with strategic discipline may survive the new competitive phase, Coinbase warns.
The era of easy gains for digital asset treasury companies (DATs) is ending, Coinbase Institutional wrote in the firm’s Monthly Outlook report, published on Sept. 10.
According to the report — authored by Coinbase Institutional’s global head of research, David Duong, and research associate Colin Basco — the industry is now entering a competitive “player-versus-player” phase, as “the DAT phenomenon has reached a critical inflection point.”
Only first movers, like Michael Saylor’s Strategy, benefited from substantial premiums to their market net asset value (mNAV), the report argues. But increased competition — the growing DAT trend this year — plus regulatory constraints and execution risks “have contributed to mNAV compression.” For a DAT, mNAV refers to the ratio between the company’s total market cap and the value of its crypto holdings.
“The scarcity premium that benefited early adopters has already dissipated, in our view,” Duong and Basco wrote in the report.
Technical demand from these vehicles for the stockpiled assets is expected to keep supporting the market, the report says, as the analysts see the current phase as neither early nor late in the cycle.
Only Most Disciplined Will Survive
Data from Strategic ETH Reserve indicates that several ETH treasury companies are already trading below their mNAV, meaning the value of the company’s crypto holdings exceeds the company’s market cap. Of the 17 public firms that have ETH treasuries, four — including SharpLink and The Ether Machine — already show a negative mNAV.
Despite the negative mNAVs, some crypto treasury companies are signaling plans to double down on their holdings. Reports indicate that SharpLink sent over $1 billion in stablecoins to Galaxy Digital on Thursday, Sept. 11, which then transferred the funds to Binance, apparently to purchase more ETH.
Now, Coinbase Institutional says that only the “most disciplined and strategically positioned” players will end up surviving.
Some in the crypto community are already thinking about how far DATs can push that competitive edge. Mert Mumtaz, CEO and co-founder of blockchain RPC platform Helius, suggested in an X post earlier this week — prompted by the USDH bidding frenzy — that treasury companies could issue stablecoins that earn yield, which is then automatically used to buy more of the treasury asset, boosting demand in a loop.
Coinbase isn’t the only firm flagging risks around the DAT play in the current market. As The Defiant reported last month, Galaxy Digital had previously also warned that a wave of companies piling crypto onto their balance sheets could heighten market risk, drawing comparisons to the investment trust boom of the 1920s, which eventually contributed to the 1929 market crash.