Will Modified Net Asset Value Premiums Decrease?
Disclaimer: The views expressed in this article solely reflect the author’s perspective and may not align with the opinions of the crypto.news editorial team.
Recently, analysts have been examining the sustainability of the elevated premiums linked with several crypto treasury firms. Many stocks in this domain are currently valued at two to seven times their modified net asset value (mNAV)—a valuation that may prove difficult to justify if these companies predominantly hold Bitcoin (BTC) or Ethereum (ETH). A change in these premiums could result in billions in lost market value.
Summary
- Prominent crypto treasury firms such as Strategy, Metaplanet, and DeFi Development Corp achieve significant modified NAV premiums by concentrating on capital structuring instead of merely holding BTC or ETH.
- Innovative financial instruments like convertible debt and moving-strike warrants allow them to quickly grow their crypto reserves while reducing shareholder dilution.
- Rapid “product velocity” provides these companies with a competitive advantage, permitting them to introduce new financing solutions and adapt swiftly to changing market conditions.
- Trust is crucial for sustaining these premiums: firms that consistently demonstrate strong performance, effective yield strategies, and believable narratives are more likely to maintain their valuations, whereas those that underperform face heightened risks.
The frontrunners in this sector do not depend solely on market speculation. They have created operational frameworks capable of sustaining valuation premiums, even in volatile market conditions. They see capital markets as testing grounds for financial products, designing and implementing structures that generate value more rapidly than the natural appreciation of crypto assets. This expertise allows Strategy, Metaplanet, and DeFi Development Corp to uphold their valuations, while others with similar assets struggle.
Maintaining mNAV premiums is a demanding undertaking that requires financial innovation, yield strategies, and prudent investments. A comprehensive analysis of mNAV premium strategies is essential for identifying crypto treasury firms worth investing in.
Capital structure engineering: the foundation of value
Market premiums arise from a meticulously crafted capital structure. Leading crypto treasury firms create, issue, and optimize financial instruments that attract capital at a premium, ensuring that every fundraising effort increases crypto holdings more effectively than it diminishes shareholder equity.
Examples include zero-coupon convertible debt, preferred shares with embedded yields, at-the-market equity strategies, and moving-strike warrants. When executed correctly, these instruments raise NAV-per-share instead of lowering it.
Strategy has set a standard, raising nearly $20 billion through equity and convertible bonds to acquire 580,000 BTC. In 2024, it broke records by issuing $6.2 billion in convertible debt, while its latest preferred equity instrument (STRC) yielded around 10%, pushing its market capitalization to double that of its Bitcoin holdings.
Product velocity protects and enhances premiums
In this context, “products” refer to financial structures, and the ability to deploy these quickly serves as a significant competitive advantage. The most effective operators consistently synchronize market sentiment with the most suitable instruments at the correct moments. These companies can be labeled as “Crypto Asset Product firms,” highlighting the development of financial products centered on crypto.
Firms that act swiftly in favorable market conditions are better positioned to leverage bullish trends, hedge against downturns, and outpace competitors still finalizing their strategies. Metaplanet illustrated this by issuing 555 million moving-strike warrants (a first for Japan), raising about $5.4 billion for Bitcoin acquisitions. Similarly, DeFi Development Corp structured a $75 million piece of a $112.5 million convertible note sale as prepaid forward agreements, reducing dilution while allowing for further Solana (SOL) purchases.
Asset strategy turns holdings into yield generators
A simplistic “buy and hold BTC” strategy cannot sustain premiums. Leading firms diversify into ETH, SOL, and stablecoins, capturing staking rewards, integrating with DeFi, and aligning with emerging market trends.
SharpLink Gaming showcases this impact: following a $425 million private placement in June 2025, it expanded its ETH holdings from 198,200 to 360,807 within a month, garnering 567 ETH in staking rewards. Yield-focused portfolios foster growth and offer narrative advantages, keeping investors engaged.
Efficiency in capital formation builds trust
Raising capital can be straightforward in a bullish market. However, achieving this without sacrificing shareholder value poses a substantial challenge. Leading firms prioritize minimizing dilution, aligning with long-term investors, and rapidly capitalizing on market momentum.
Metaplanet’s moving-strike warrants were not only innovative but executed on a large scale, raising around $5.4 billion while maintaining roughly a 7x premium over modified NAV. This precision became a value driver in itself, attracting institutional investment and reinforcing its premium.
Narrative credibility sustains premiums
Valuation multiples in this sector heavily rely on trust as much as financial performance. Investors need assurance that each fundraising initiative will promote growth, that leadership can deliver results, and that innovation can thrive through various market cycles.
Strategy, Metaplanet, and DeFi Development Corp have effectively demonstrated their ability to deliver, establishing a self-sustaining cycle: successful outcomes elevate premiums, which facilitate capital raises, and those raises support further achievements.
The survival challenge for premiums
If modified NAV premiums start to decline, not all firms will feel the same effects. Companies excelling in capital structure engineering, product velocity, asset strategy, capital formation efficiency, and narrative credibility will be better positioned to maintain their valuations. Others may find their premiums dissipating.
In a landscape where anyone can hold crypto, only true capital engineers possess the ability to transform those assets into lasting market significance—and sustain those premiums.
