In a landmark deal that could reshape the landscape of digital asset management, Strive Asset Management (ASST) has acquired Semler Scientific (SMLR) in an all-stock transaction. This acquisition marks the first-ever merger between two Digital Asset Treasuries (DATs) holding Bitcoin, an event that not only consolidates a significant amount of Bitcoin under one entity but also brings to light some complexities in valuing Bitcoin treasury companies.
The Ripple Effect of a Historic Acquisition
Strive’s acquisition of Semler gives the combined company control over more than 10,900 Bitcoin, a substantial amount by any metric. This merger is expected to increase the net asset value (NAV) per share, a measure often viewed by DAT investors as an indicator of “yield.” However, this historic move has also sparked a broader conversation about the metrics used to assess the value of Bitcoin treasury companies, particularly the controversial “mNAV” metric.
NYDIG’s Call for Change
Greg Cipolaro, the Global Head of Research at NYDIG, recently voiced strong criticism of the mNAV metric, arguing that it should be removed from industry reporting. “At best, it’s misleading; at worst, it’s disingenuous,” Cipolaro stated in a note released this week. NYDIG’s stance highlights the pitfalls of using mNAV, which is calculated as the market cap divided by the crypto held, without considering other crucial variables.
The firm pointed out the inadequacy of mNAV in accounting for operational businesses or additional assets that a DAT might own. It’s a significant oversight, given that most major Bitcoin treasury firms have diversified operations that contribute to their overall value. This omission can lead to a skewed perception of a company’s true worth and mislead investors.
The Complexities of mNAV
Further complicating the mNAV issue is its reliance on “assumed shares outstanding,” a figure that often includes convertible debt not yet converted into shares. NYDIG highlighted the potential pitfalls here, noting that convertible debt holders typically demand cash, not shares, when redeeming their debt. This creates a more onerous liability for DATs compared to simply issuing new shares.
Convertible debt is essentially volatility harvesting, combining debt with call options. This structure incentivizes DATs to maximize their equity volatility, which could create misleading perceptions of a company’s financial health if not properly accounted for.
Impact on Market Trends
Currently, publicly traded Bitcoin treasury firms collectively hold over 1 million BTC. Despite this substantial holding, many of these companies are trading below their mNAV, a situation that could signal a wave of upcoming acquisitions. The Strive-Semler merger might just be the tip of the iceberg as companies look to consolidate and capitalize on undervalued assets.
The potential for more acquisitions is a double-edged sword. On one hand, it presents opportunities for strategic growth and increased market share for savvy investors and companies. On the other hand, it underscores the need for accurate and reliable valuation metrics, lest investors make decisions based on incomplete or misleading information.
A Balancing Act for Investors
For investors, navigating the world of Bitcoin treasury companies requires a careful balancing act. While the potential returns are enticing, the complexities of valuation metrics like mNAV necessitate a cautious approach. Investors must look beyond headline figures and dig deeper into the financial structures and operational realities of these companies.
NYDIG’s call to ditch the mNAV metric is a step towards greater transparency and accuracy in the industry. It highlights the need for metrics that provide a more holistic view of a company’s value, taking into account all assets and liabilities.
Looking Ahead
As the digital asset landscape continues to evolve, the industry must adapt to ensure that investors have the tools they need to make informed decisions. The Strive-Semler merger is a reminder of both the potential and the pitfalls of investing in Bitcoin treasury companies.
In the coming months, the industry will be watching closely to see if NYDIG’s recommendations gain traction and whether other firms follow suit in reevaluating their valuation metrics. For now, investors would do well to heed the call for caution and diligence, ensuring that their investment strategies are as robust and resilient as the digital assets they seek to hold.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
