Strive–Semler Deal Highlights Flaws in Valuation Method
NYDIG has called on Bitcoin treasury companies to stop using the “mNAV” metric, arguing that it paints an inaccurate picture of corporate value and could mislead investors. The warning comes in the wake of Strive Asset Management’s all-stock acquisition of Semler Scientific, a historic deal that created the first-ever merger between two Digital Asset Treasuries (DATs).
The combined company now controls over 10,900 BTC, instantly making it one of the largest institutional holders of Bitcoin. While the acquisition boosts net asset value (NAV) per share, NYDIG says it also exposes the weaknesses of mNAV, a popular industry measure defined as market capitalization divided by Bitcoin held.
Why NYDIG Says mNAV Is Flawed
Greg Cipolaro, Global Head of Research at NYDIG, argued that mNAV should be dropped from industry reporting altogether.
“At best, it’s misleading; at worst, it’s disingenuous,” NYDIG stated.
The firm identified two major flaws:
- mNAV ignores operating businesses and other assets. Most major Bitcoin treasury firms run businesses that generate revenue, which are not reflected in the metric.
- It relies on assumed shares outstanding. This often includes convertible debt that has not been converted into equity. According to NYDIG, debt holders would demand cash repayment, creating far greater liabilities than simply issuing shares.
Because convertible debt acts as a mix of debt and call options, companies may be incentivized to maximize equity volatility rather than manage responsibly, NYDIG warned.
Implications for Bitcoin Treasury Companies
Publicly traded Bitcoin treasuries currently hold over 1 million BTC combined, but many are trading below their mNAV. Analysts believe this disconnect could drive further acquisitions, as firms look to consolidate and strengthen their market positions.
For investors, NYDIG’s critique underscores the need for more reliable valuation frameworks that reflect both digital assets and underlying business operations. As the industry matures, pressure is mounting to adopt standards that provide transparency without distorting financial reality.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.