In a recent dialogue with Anthony Scaramucci, founder of SkyBridge Capital, Mike Novogratz, CEO of Galaxy Digital Inc. (NASDAQ: GLXY), conveyed significant concerns about the operational frameworks and market valuations of cryptocurrency treasury companies. Novogratz stressed the vital need for such firms to move beyond the passive role of merely holding underlying digital assets in order to foster genuine shareholder value.
Novogratz noted that many cryptocurrency treasury companies currently trade at a discount relative to their net asset values (NAV), typically ranging between 80% to 95% of NAV. He attributed this valuation gap to the absence of active management approaches that transform these businesses into dynamic enterprises rather than simply asset custodians. "The role of the CEOs and boards of these Digital Asset Trusts (DATs) is to prioritize shareholder value," he asserted. "My view is that shareholder value is unlikely to be created just through owning the underlying assets."
The Galaxy Digital chief further remarked that the era when stock prices were artificially elevated by hype, often allowing early investors to realize gains at the expense of new investors, has come to an end. He cited figures such as Michael Saylor and Tom Lee, recognizing their temporary success in this domain but emphasizing that similar strategies failed for others in the industry.
When prompted by Scaramucci about potential strategies if placed in charge of a cryptocurrency treasury firm, Novogratz indicated he would seek to leverage the unique skills and expertise present within the company. He emphasized the importance of devising innovative concepts that depart from the model of exchange-traded funds (ETFs) to establish compelling narratives that differentiate the company in the market.
Both Novogratz and Scaramucci hold roles within digital asset treasury firms. Scaramucci currently serves as a strategic advisor to AVAX One Technology Ltd. (NASDAQ: AVX), a company focused on the Avalanche (CRYPTO: AVAX) blockchain. Meanwhile, Novogratz's Galaxy Digital has participated alongside Web3 infrastructure firm Jump Crypto and venture capital firm Multicoin Capital in a private investment in public equity (PIPE) of Forward Industries, Inc. (NASDAQ: FORD), recognized as a leading SOL-focused treasury entity.
The surge in cryptocurrency treasury companies has been largely inspired by the remarkable success of Strategy Inc. (NASDAQ: MSTR), which stands as the world’s largest Bitcoin (CRYPTO: BTC) holder. Despite this prominence, MSTR currently trades at about 86% below the intrinsic value of its Bitcoin assets. According to an analysis by the law firm DLA Piper, there are now over 200 such companies with a combined market capitalization of roughly $150 billion, marking more than a threefold increase compared to the previous year.
However, the expansion of these firms has drawn criticism due to some entities' tendencies to invest in less-established, highly volatile tokens, raising concerns about risk profiles and valuation stability. Moody’s Ratings Senior Analyst Cristiano Ventricelli highlighted the vulnerability of these equities, observing that they become subject to increased downward pressure during broader market downturns.
On the trading front, shares of Strategy Inc. and Bitmine Immersion Technologies Inc. (NYSE: BMNR) concluded recent sessions with gains of 3.18% and 3.03%, respectively, demonstrating active market interest in crypto treasury-related stocks despite underlying valuation challenges.