Will an Ethereum Run Make It Hard for ETH Treasuries to Raise Cash?

As Ethereum claws its way upward this week, a looming challenge threatens digital asset treasury (DAT) companies as their mNAVs have come close to 1 or slipped below it, with experts signaling potential trouble for future capital inflows.

mNAV, or market-to-net asset value, compares a company’s stock value to that of its assets. And for digital asset treasury companies, the value of their crypto treasuries can experience dramatic fluctuations.

Data from Strategic ETH Reserve shows a steep drop in mNAV for key players. BitMine and SharpLink Gaming have seen their mNAV fall below 1, to 0.99 and 0.89, respectively. BitDigital and GameSquare Holdings Inc have seen there’s slip, but hold above 1 so far. BTBT is at 1.51 and GAME has fallen to 1.13.

The downtick in mNAV tracks the broader crypto market’s dip, with Bitcoin falling from its mid-August peak, when it set a new all-time high of $124,545.6, to $112,154, per CoinGecko.

For DATs holding hefty Ethereum reserves—BitMine has $8.3 billion and Sharplink holds $3.7 billion worth of ETH—this erosion of premium could choke off their ability to raise cash without punishing existing investors.

“I think that’s why we’ve seen capital raises stall after a busy stretch earlier this year: Investors just don’t want to pay the premiums for the same ETH exposure,” Arthur Azizov, founder and investor at B2 Ventures, told Decrypt.

For DATs, mNAV is the lifeblood of capital raises, particularly through at-the-market (ATM) equity programs, where a premium over net asset value allows companies to issue stock without harming investors.

But as mNAVs shrink, “companies must issue far more shares to raise the same capital, leading to painful dilution,” CryptoQuant analyst Maarten Regterschot told Decrypt.

While Ethereum’s price volatility erodes mNAV cushions, relentless ATM share sales flood the market, driving down valuations, Azizov highlighted. Adding pressure, spot Ethereum ETFs offer investors direct exposure without the premium DATs once commanded, he said.

“Investors aren’t willing to pay extra for the same Ethereum,” Azizov explained, noting why capital raises have ground to a halt lately.

According to Regterschot, a stagnant ETH/BTC price is another source that has pressured mNAVs’ recent plunge, creating a feedback loop where fading premiums and rising share supply choke demand.

The outlook for Q4 is make-or-break, both experts highlighted.

A bullish Ethereum run could revive mNAVs, allowing DATs to issue stock on favorable terms and bolster ETH holdings, thereby restarting growth. But if ETH stalls or the crypto market turns bearish due to macroeconomic concerns, mNAVs could dip below 1, effectively putting a stop on new issuance.

“A strong quarter is critical,” Azizov said. Without it, DATs may be forced to lean on staking yields, with netflows stalling as they navigate a constrained funding landscape.