Digital Asset Treasuries Can’t Hold Premiums, Warns Bitwise CIO

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Digital asset treasuries are back in the spotlight as market analysts warn that their long-standing premium valuations may not survive the changing landscape. With spot ETFs offering cleaner exposure and new regulatory pressures emerging, Bitwise Chief Investment Officer Matt Hougan says the traditional DAT model is confronting a “high hurdle” that most firms will struggle to clear.

Bitwise CIO: Premiums Are the Exception, Not the Rule

Hougan argues that the majority of digital asset treasuries are structurally wired to trade below the value of the crypto they hold. According to him, three forces, illiquidity, expenses, and operational risks, consistently push valuations downward.

He explains that investors typically discount DATs because they do not receive direct ownership of the underlying assets. “Why pay full price for bitcoin you’ll receive in a year?” he asked, noting that any delay or friction automatically suppresses market value.

Beyond illiquidity, Hougan highlights ongoing costs. Operating expenses, salaries, and administrative overhead slowly dilute crypto-per-share over time. Meanwhile, execution risks, ranging from management mistakes to unforeseen losses, further widen the gap between a DAT’s balance sheet and its market valuation.

These pressures, he says, form a baseline discount that DATs must constantly fight against.

Limited Tools to Fight Structural Drag

While there are ways for treasury companies to boost returns, such as issuing debt, lending tokens, buying assets below market value, or selling options, Hougan describes these as uncertain levers that only work under specific conditions. Worse yet, they frequently introduce new risks that can undermine the firm’s long-term stability.

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“Expenses and risk compound over time,” Hougan warned, adding that even well-managed DATs face mounting difficulty sustaining premiums through multiple market cycles. Only a few exceptional players, he believes, are capable of outperforming this structural gravity.

ETFs Emerge as the Preferred Alternative

As DATs encounter growing structural challenges, market sentiment has shifted toward exchange-traded funds. ETF specialist Nate Geraci says spot ETFs have become “DAT killers,” offering simple, precise exposure without the friction of treasury-style structures. Bloomberg analyst Eric Balchunas agrees, noting that ETFs achieve the same goal but with cleaner tracking and fewer moving parts. This discussion comes just as MSCI considers excluding crypto-heavy companies from major indexes, an adjustment that could trigger billions in passive outflows.

Adding to the conversation, Inspired Analyst noted that Bitwise’s CEO has recently bought Bitcoin at $85,000 and $89,000, while Hougan believes solid projects like ETH, XRP, and UNI continue to progress quietly. He expects clearer regulations in 2026 to unlock even greater value for these assets.

With the industry preparing for major structural changes, crypto treasuries may be entering their most challenging chapter yet.

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