Source: Pantera Capital
Original title: DAT Value Creation
Compiled and organized by: BitpushNews
Preface:
Crypto venture capital firm Pantera Capital revealed in its latest blockchain letter that it has invested over $300 million in Digital Asset Treasury (DAT) companies, which are a class of publicly traded companies holding cryptocurrency reserves on their balance sheets, a number that is steadily growing.
Pantera states that its investment philosophy in DAT companies is simple: "DATs can generate income, thereby increasing net asset value per share, and over time you will hold more underlying token ownership than merely holding spot assets. Therefore, holding DATs can offer higher return potential compared to holding tokens directly or through ETFs."
The original text is as follows:
DAT VALUE CREATION
Our investment philosophy in Digital Asset Treasury companies (DATs) is based on a simple premise:
DATs can enhance net asset value (NAV) per share by generating income, thus over time holding more underlying tokens than merely holding spot assets.
Thus, holding DATs may offer higher return potential compared to holding tokens directly or through ETFs.
Pantera has deployed over $300 million in various token and capital market DATs. These DATs are leveraging their unique advantages to adopt strategies that increase their digital asset holdings on a per-share basis. Here is an overview of our DATs investment portfolio.
BitMine Immersion (BMNR) is the first investment of the Pantera DAT Fund, embodying a company with a clear strategic blueprint and execution capability. As chairman, Fundstrat's Tom Lee has mapped out BitMine's long-term vision: acquiring 5% of the total supply of Ethereum—what they call '5% Alchemy.' We believe it is valuable to consider BMNR as a case study of a DATs with efficient execution.
BitMine (BMNR) case study
Since BitMine launched its treasury strategy, it has become the largest Ethereum treasury globally and the third-largest DATs (behind Strategy and XXI), holding a total of 1,150,263 ETH valued at $4.9 billion (as of August 10, 2025). BNMR is also the 25th most liquid stock in the U.S., with a daily trading volume of $2.2 billion (as of the five-day moving average on August 8, 2025).
The case of Ethereum
The key factor to the success of DATs is the long-term investment value of its underlying tokens.
The DAT concept of BitMine is based on a core argument: as Wall Street migrates on-chain, Ethereum will become one of the most significant macro trends of the next decade. As we wrote in last month's letter, with the increasing importance of tokenization innovation and stablecoins, the 'on-chain migration' is underway. Currently, there are $25 billion of real-world assets on public blockchains—not including the $260 billion in stablecoins, which collectively have become the 17th largest holder of U.S. Treasury bonds.
"Stablecoins have become the ChatGPT story of the crypto world."
— Tom Lee, Chairman of BitMine, Pantera DAT conference call, July 2, 2025
Most of these activities are happening on Ethereum, allowing ETH to benefit from the ever-growing demand for block space. As financial institutions increasingly rely on Ethereum's security to support their operations, they will be incentivized to participate in its proof-of-stake network—thereby driving further accumulation of ETH.
Growing ETH Per Share (“EPS”)
After determining the investment value of the underlying tokens, the business model of DATs is to maximize their token ownership on a per-share basis. There are several primary ways to grow the per-share token holding (ETH per share, “EPS”):
Issuing stock at a premium above the net asset value (NAV) per share of the tokens.
Issuing convertible bonds and other equity-linked securities to take advantage of the volatility inherent in stocks and underlying tokens.
Acquiring more tokens through staking rewards, DeFi yields, and other operational income. Notably, this is an additional means unique to ETH and other smart contract token DATs, which the original Bitcoin DATs (including Strategy) do not possess.
Acquiring another DAT whose trading price is close to or below NAV.
At this point, BitMine has grown its per-share ETH (coincidentally also abbreviated as 'EPS') at an astonishing rate in the first month of launching its ETH treasury strategy, far exceeding other DATs. The ETH accumulated by BitMine in the first month was more than what Strategy (formerly MicroStrategy) accumulated in its first six months of executing that strategy.
BitMine primarily increases EPS by issuing stock and generating staking rewards, and we believe BitMine is likely to soon expand its strategy to begin issuing convertible bonds and other financial instruments.
Examples of value creation
The price of DATs can be broken down into the product of three factors:
(a) Number of tokens per share,
(b) Underlying token price,
and (c) multiple of NAV (“mNAV”).
At the end of June, BMNR's stock price was $4.27 per share, about 1.1 times its initial DAT financing's $4 NAV per share. Just over a month later, the stock closed at $51, approximately 1.7 times its estimated $30 NAV per share. This represented a 1100% price increase within a month, of which:
(a) EPS growth of approximately 330% contributed about 60% of the increase;
(b) The price of ETH rose from $2.5k to $4.3k, contributing about 20% of the increase;
(c) The expansion of the mNAV multiple to 1.7 contributed approximately 20% of the increase.
This means that the vast majority of BitMine's stock price increase is driven by the growth in the underlying number of ETH per share, which is the core engine controllable by management and is precisely what distinguishes DATs from simply holding spot assets.
The third factor we have yet to discuss is mNAV. Naturally, one might ask: why would someone be willing to purchase DATs at a premium to NAV?
Here, I find it useful to compare it to financial enterprises based on balance sheets like banks.
Banks try to generate returns on their assets, and investors will give valuation premiums to those companies they believe can consistently generate returns above their cost of capital. The highest quality banks, such as JPMorgan Chase, trade at twice their NAV (or book value).
Similarly, if investors believe a DAT can consistently grow its NAV per share, they will also choose to value it at a premium above NAV. We believe that BMNR achieved approximately 640% growth in NAV per share in just one month, which is enough to justify its mNAV premium.
Whether BitMine can continue to effectively execute its strategy will become evident over time, during which it will inevitably face challenges.
However, the management team and performance record of BitMine thus far have attracted support from heavyweight traditional financial figures such as Stan Druckenmiller, Bill Miller, and ARK Invest. We expect that the growth story of the highest quality DATs will gain recognition from more institutional investors, much like what Strategy has experienced.
Ethereum's tenth anniversary
July 30 marks the tenth anniversary of Ethereum.
When I first met Vitalik Buterin, he was a 17-year-old (Bitcoin magazine) reporter!
In 2014, we met again on the 'Colored Coins' project—an enchanting precursor to today's RWAs, NFTs, and various asset-backed tokens. He proposed the concept of Ethereum in January 2015.
Its development has been astonishing. A decade of stable operation and uninterrupted trading. Ten years of innovation and reshaping the future of global markets.
We have supported many visionary teams and developers who are building applications and infrastructure that propel Ethereum's mission forward. Our commitment to this ecosystem remains steadfast. The work is not yet complete.
Revival of prediction markets: Markets for Everything
The revival of prediction markets is underway. While new prediction markets occasionally emerge, there are now numerous trading platforms for various market event types, forms (such as mobile, Tinder-like swipe interfaces, trading terminals), and regions.
This revival has been catalyzed by several events:
The success of Polymarket and Kalshi: Prediction markets continue to achieve billions of dollars in monthly trading volume. Their success—especially in the election markets following the 2024 U.S. presidential election—proves the demand for event-based markets.
Clarity in the regulation of prediction market event contracts: On October 2, 2024, the D.C. Circuit Court of Appeals rejected the request for a stay, allowing Kalshi to launch its election contracts. Robinhood also launched its election market in the same month. The clarity of regulation has a tremendous impact on the innovation companies can bring to financial markets.
Growth of the speculative generation: The median age of first-time homebuyers is 38, significantly rising in recent years. Retail zero-day options trading is about to account for two-thirds of all daily options trading volume, indicating that retail investors are eager for quick wins in volatile markets. The 'TikTokization' of financial markets continues, along with a desire to bet on more markets until there is nowhere left to bet.
While the speculative allure of prediction markets drives participation, these markets are far from useless. By aligning incentives with information, they can help uncover accurate information and insights.
Markets help predict outcomes, and various new markets are emerging—including political events, corporate earnings forecasts, weather predictions, and FDA drug approvals.
As prediction markets grow, many teams have adopted different product directions and market entry strategies. From an investment perspective, I believe that new prediction markets that can achieve long-term success will focus on building excellent products serving markets with the following common characteristics:
Markets where events occur very frequently
Markets with high leverage or the ability to win large returns with minimal capital
Markets with high outcome value—that is, the predictive value itself has signaling significance
Let's discuss this in more detail:
High leverage
Users want high leverage or compounded odds to increase returns. Parlay bets, perpetual contracts, intraday event markets—all these prediction market products have the potential to increase demand for prediction market events. Imagine a midterm election where someone can correctly parlay all outcomes. Given the rise of zero-day options, intraday markets (half a day, a few hours, a few minutes) are also worth considering.
High-frequency prediction markets
Prediction markets are habitual—users come to bet on markets they are interested in. More markets help maintain user engagement, but what truly matters is the existence of high-frequency markets that drive user retention.
Users wishing to bet on one-time high-profile events (presidential elections, pop culture events, etc.) can do so on any platform, and they are likely to use the platform they visit most often. Having more recurring markets will also create better economic benefits for platforms, allowing them to list more markets, pay customer acquisition costs, or be more competitive in other ways. This situation has already occurred in sports betting, where platforms like DraftKings utilize DFS (daily fantasy sports) as a valuable customer acquisition and retention tool, fostering habitual behavior among users.
High market outcome value
Elections are not frequent events but have high signal value. This will attract substantial capital into these markets.
Polymarket recently released FDA approval results, decisions that can make or break companies worth billions. Kalshi's climate market has predictive signal value, and theoretically, other types of derivative contracts can be built based on a multitude of daily predictive signals. Markets with high outcome value will drive higher trading volume and deeper liquidity.
In contrast, many pop culture markets—reality shows, Grammy winners, Nobel laureates—while betting is interesting, have lower value outcomes. Sometimes the outcome value is low partly because the results may be manipulated. A prediction market combining shows like (Survivor) would be interesting, but if the betting amounts are large enough, people will find ways to manipulate the market.
The popularity of prediction markets will leverage efficient markets to generate valuable predictive insights and provide a leveraged form of entertainment for the same group of customers trading individual stocks or engaging in sports betting. We are about to see an explosion of market types and things people can bet on. The era of Markets for Everything is coming.
Entering the second phase of the bull market
Bitcoin often leads bull market cycles, while altcoins lag in the early stages. As the cycle progresses, altcoins typically gain momentum and outperform Bitcoin near the end of the cycle. We refer to this as the 'first phase' and 'second phase' of a bull market.
Importantly, in the past two cycles, altcoins contributed most of the value creation. In the 2015-2018 cycle, altcoins accounted for 66% of the total crypto market cap growth. In the 2018-2021 cycle, they contributed 55%.
And so far, in this cycle, altcoins have only accounted for 35% of total market growth.
For a long time, Bitcoin has benefited from regulatory clarity—not just because it is classified as a commodity but also because its role as 'digital gold' is well understood. This was a key driver for its outperformance against altcoins early in this cycle, as altcoins have historically faced greater regulatory uncertainty—until recently. With the new administration taking office, this dynamic is changing, driving significant progress in digital asset innovation.
Historically, the regulatory clarity and favorable conditions that favored Bitcoin are now starting to extend to altcoins. The market is beginning to reflect this.
As regulatory victories continue to accumulate, momentum is strengthening. Last month, President Trump signed the (GENIUS Act) into law, creating conditions for the prosperity of regulated stablecoins in the U.S., which could become the engine of global financial transactions. The (CLARITY Act) has passed the House, aiming to establish clearer boundaries between digital commodities and digital securities—helping to resolve long-standing jurisdictional uncertainties between the SEC and CFTC. A transformation is underway, and there is reason to believe that non-Bitcoin tokens will be among the biggest beneficiaries.
Innovation and development have been accelerating, especially in the tokenization space. Robinhood recently launched stock tokens supported by Arbitrum, aimed at democratizing stock investment and creating more efficient markets. Major U.S. banks such as Bank of America, Morgan Stanley, and JPMorgan Chase are exploring issuing their own stablecoins. BlackRock's BUIDL fund has accumulated $2.3 billion in tokenized treasury bonds. Figure has processed over $50 billion in blockchain-native RWA transactions. Besides its tokenized treasury bond fund, Ondo also plans to provide over 1,000 tokenized stocks through Ondo Global Markets on the NYSE and Nasdaq. A major on-chain migration is underway.
Ethereum drives non-Bitcoin market share growth
Most real-world assets are flowing into Ethereum.
In the $260 billion stablecoin market, 54% of stablecoins are issued on Ethereum. 73% of on-chain Treasury bond assets are on Ethereum. DATs are accumulating at unprecedented levels. Wall Street is beginning to realize this, and demand for ETH is surging.
The price of Ethereum priced in Bitcoin has risen 103% since hitting a bottom in April 2025.
Bitcoin halving cycle – precise prediction
This is insane!
During the crypto winter, we used research from the previous three Bitcoin halvings to predict that Bitcoin would reach $117,482 on August 11, 2025.
It really happened!!!
The halving has occurred... updated version
In our November 2022 (blockchain letter), we updated our analysis of the impact of halvings on price since the last halving in 2013. The chart below is an updated version of our analysis at that time.
Wishing you a pleasant August,
"Let 'alternative' return to 'altcoins'" – Dan Pantera
