The principle behind "Digital Asset Treasuries" (DATs), pioneered by Strategy (formerly MicroStrategy), rests on a simple mechanism: a publicly listed company raises funds by issuing equity or debt, then uses the proceeds to buy bitcoin. As long as the market values the company above the value of its bitcoin reserves (referred to as a "premium to NAV", or mNAV above 1), each new issuance creates value for existing shareholders by increasing the amount of BTC held per share. This self-reinforcing mechanism is what enabled Strategy to accumulate 847,000 BTC.
The problem arises when that premium disappears. Strategy's mNAV has just dropped to 0.99, breaching the critical threshold of 1 to the downside. In other words, the market now values the company slightly below the value of its bitcoin holdings. At this level, any new equity issuance amounts to selling company shares at a discount: it dilutes shareholders without generating any BTC yield. A $300 million raise announced earlier in the week failed to reassure investors.
Meanwhile, STRC (Strategy's preferred share, an instrument halfway between equity and a bond, issued with a $100 peg and a fixed coupon) closed Thursday at $75.69, roughly 25% below its reference value, and was down another $2 in pre-market. The common share MSTR touched a 52-week low of $85.33. Bitcoin, sliding to $58,000, pushed Strategy's unrealized loss above $13 billion.
As we highlighted in previous commentaries, Strategy's core problem remains the sustainability of the model without sufficient cash to fund both acquisitions and debt servicing, without selling BTC or massively diluting common shareholders. In the short term, solvency is not at stake: the company has 9.8 months of dividend coverage and its first notes do not mature until 2027. What has broken is the narrative that justified the premium: that of a machine issuing securities to buy bitcoin, indefinitely and accretively.
Contagion is no longer hypothetical
For institutional investors, the question has shifted. It is no longer whether Strategy survives, but how many of its imitators (Metaplanet, Bitmine, Capital B, Semler Scientific and a long tail of smaller listed companies that adopted the same model) can hold up if the mNAV remains durably below 1. Most have neither Strategy's cash buffer nor its debt maturity calendar.
Indirect exposure is an often underestimated risk. Passive mid-cap mandates hold DAT names without explicit bitcoin conviction. Several preferred issuances similar to STRC sit in bond portfolios solely on the basis of their fixed coupon, without the risk tied to the underlying asset (bitcoin) being genuinely accounted for.
What happens next for Strategy?
The DAT cohort is splitting in two. Strategy has the size and the maturity calendar to weather a long winter, even if its premium does not recover. Most imitators do not have that foundation.
Thierry Lobjois, director at French exchange Paymium and a long-standing Strategy bull, offers a different read: "The situation is difficult on one point: when the mNAV is around 1, it's hard to raise capital on the common equity side. But Strategy can still raise another $10–15 billion on Stretch, and the next step is simply to continue the business. It's a matter of timing, because Bitcoin won't stay at this level forever."
The outcome will determine whether DATs establish themselves as a fully-fledged institutional investment vehicle, or are remembered as a cycle product, built on a premium that could not survive its own arithmetic.
>> Report: Digital Assets Treasuries (DATs): a good bet, really?
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