Bitwise CIO Matt Hougan Reveals What Separates Good DATs from Bad

TLDR

• Bitwise CIO Matt Hougan said only DATs executing complex crypto strategies deserve to trade at a market premium.
• He explained that most Digital Asset Treasuries now trade near their market net asset values after recent revaluations.
• Hougan stated that passive DATs holding crypto assets without innovation will likely trade below their underlying value.
• He identified MicroStrategy as the leading example of a DAT using complex corporate financing to grow Bitcoin holdings.
• Hougan said strategies like writing covered calls and participating in DeFi require skill and can be rewarding if done well.

Bitwise CIO Matt Hougan stated that only Digital Asset Treasuries (DAT) executing complex crypto strategies deserve market premiums. He explained that most DATs now trade near their market net asset value after sharp revaluations across the sector. Hougan emphasized that firms must prove operational strength as investors reevaluate performance.

DAT Premiums Narrow as Market Values Converge

Bitwise CIO said the DAT market has shifted toward fair value with many firms trading close to their net asset values. He highlighted that market ratios that once exceeded 25 have now converged toward 1.0. The data, he added, signals that investors now differentiate between active and passive DAT operators.

Hougan said that some companies should trade above their NAVs, while others should trade below based on execution quality. He stressed that the question investors must ask is simple: “Are they doing something hard?” This approach, he said, separates performing firms from those relying only on holding assets.

The Bitwise CIO explained that passive DATs lack innovation and add limited value to shareholders. He said buying crypto assets and holding them is no longer complex as ETFs offer similar exposure. Therefore, he said, passive models fail to justify premiums once investors assess comparable opportunities.

Strategy Leads Active DAT Models

Hougan identified MicroStrategy (Strategy), now called Strategy, as an example of a DAT with a complex, value-driven strategy. The Bitwise CIO said the company owns $66.22 billion in Bitcoin and carries $8 billion in debt. He added that it continues to issue debt instruments backed by its Bitcoin position.

He said Strategy’s model is difficult because raising equity capital at that scale is rare for corporate entities. The firm, he explained, uses tools like convertible debt and preferred shares to expand its holdings strategically. This structure, he added, can justify a premium when executed efficiently.

Bitwise CIO stated that Strategy demonstrates how corporate financing can create sustainable leverage in digital assets. He said such strategies require skill and discipline to manage debt and equity exposure. As a result, firms like Strategy attract investors seeking complex execution and measurable returns.

Hard Work Separates Winners from Weak DATs

The Bitwise CIO noted that other DATs can pursue advanced strategies if they handle risk properly. He cited covered calls, DeFi participation, and strategic lending as examples of complex approaches. These methods, he said, demand expertise but can enhance returns when executed effectively.

Hougan warned that DATs taking an easy route by just holding crypto will lose investor interest. He said “lazy approaches” fail to create long-term value and often trade below their underlying assets. In his view, success depends on doing difficult tasks consistently and transparently.

Bitwise CIO added that “DATs are just companies” and performance reflects business discipline. He said strong management, innovation, and financial control define firms that earn sustained trust. Poor execution, he said, results in declining market confidence and lower valuations.

Market Tightens as DATs Face Pressure

On-chain data platform Artemis reported that DAT valuations have sharply compressed in recent months. It found that companies once trading far above asset value now align more closely with their holdings. Bitwise CIO said this adjustment reflects a more realistic market environment for digital asset firms.

Metaplanet’s recovery, he said, shows that the market still rewards structured execution under pressure. However, he added that the broader DAT sector remains under scrutiny as investors demand proof of strategy. Bitwise CIO concluded that only firms “doing hard things well” will sustain premiums in this tightening phase.

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