Crypto for Advisors: Digital Asset Treasuries

Digital Asset Treasury (DAT) companies, exemplified by MicroStrategy, are public entities that explicitly purchase and hold digital assets like Bitcoin, often trading at a premium to their Net Asset Value (mNAV). This premium creates a 'money printer' dynamic for promoters, allowing them to raise capital easily. However, for purchasers, buying a DAT stock after an mNAV is established means buying a speculative premium that can easily fade. Advisors need to understand several key risks: the premium/discount to NAV, the use of leverage which magnifies volatility, and regulatory uncertainty, especially for DATs holding assets other than Bitcoin. Furthermore, the recent approval of exchange-traded products (ETPs) that bypass the corporate wrapper dilutes the traditional advantage DATs held for institutional investors hesitant to buy crypto directly. Advisors should evaluate a DAT's treasury mix, leverage, and premium/discount to determine if it suits a client's goal of diversified exposure versus speculation.

(Source：CoinDesk)