Written by: Pantera Capital
Compiled & Edited by: Janna, ChainCatcher
This article was written by Cosmo Jiang, General Partner and Portfolio Manager at Pantera Capital. The investment in digital assets has long gone beyond the phase of 'simply hoarding coins for appreciation.' Digital Asset Treasuries (DATs), with their unique logic of 'enhancing per-share net asset value and accumulating more underlying tokens,' have become highly sought-after by institutions. Pantera has invested heavily with $300 million into DATs, and BitMine has made waves with its ETH reserves. This article will break down the value code of DATs, revealing the deeper reasons why leading industry institutions choose this track and understanding the new trends in digital asset investment.
(1) Investment Logic of Digital Asset Treasury (DATs)
Our investment logic for DATs is based on a simple premise: DATs can enhance the per-share net asset value by generating income, ultimately achieving more underlying token holdings than simply holding the spot. Therefore, holding DATs may offer higher return potential than directly holding tokens or holding tokens through ETFs. Pantera has deployed over $300 million globally into DATs, covering a variety of tokens. These DATs are leveraging their unique advantages to achieve growth in per-share value through strategic accumulation of digital assets. Below is an overview of our DATs portfolio.
BitMine Immersion is an innovative company focused on blockchain technology and the financialization of digital assets, with the NYSE code BMNR. As the first investment of the Pantera DAT fund, BitMine has demonstrated a clear strategic path and outstanding execution capabilities. BitMine's chairman Tom Lee proposed BitMine's long-term vision: to acquire 5% of the global ETH supply - the '5% Alchemy Plan.' We believe that a deep analysis of BitMine's value creation process can provide a typical case for understanding the operational model of high-execution DATs.
Since the launch of the reserve strategy, BitMine has become the world's largest ETH reserve holder and the third largest DAT (after Strategy and XXI), holding 1,150,263 ETH worth $4.9 billion as of August 10, 2025. At the same time, BitMine is the 25th highest liquid stock in the U.S., with a five-day average trading volume of $2.2 billion as of August 8, 2025.
(2) Strategic Value of Ethereum
The core of DATs' success lies in the long-term investment value of the underlying tokens. BitMine's DAT strategy is based on the following judgment: as Wall Street undergoes full on-chain transformation, Ethereum will become one of the most important macro trends in the next decade. As we mentioned last month, the 'great chain migration' is underway - the importance of tokenization innovation and stablecoins is growing day by day. Currently, $25 billion of real assets are on-chain, along with $260 billion in stablecoins (equivalent to the 17th largest holder of U.S. Treasuries globally), driving this process. As BitMine's chairman Tom Lee stated at the beginning of July 2025, 'Stablecoins have become a ChatGPT-level phenomenon in the crypto space.'
These activities mainly occur on the Ethereum network, allowing ETH to directly benefit from the growing demand for block space. As financial institutions increasingly rely on the security of Ethereum to support their business, they will be more motivated to participate in proof-of-stake networks, further driving up ETH demand.
(3) Actual Evidence of DAT Value Creation
After establishing the investment value of the underlying tokens, the business model of DATs focuses on maximizing the per-share token holdings. The main approaches include:
Premium issuance of shares: Issuing shares at a price higher than the net asset value (NAV) per token.
Issuing convertible bonds: Monetizing the volatile value of stocks and tokens through equity-linked securities.
Reinvestment of earnings: Increasing token holdings through staking rewards, DeFi earnings, and other operational revenues (this is a unique advantage of smart contract tokens like ETH, which traditional Bitcoin DATs like Strategy do not possess).
Acquiring undervalued assets: Purchasing DATs that are trading close to or below NAV.
In the first month of launching the ETH reserve strategy, BitMine achieved astonishing per-share ETH growth, significantly outpacing its peers. Its ETH accumulation in the first month has exceeded the total amount for Strategy in the first six months. BitMine primarily achieves growth through stock issuance and staking rewards and is expected to soon expand into convertible bonds and other financing tools.
Source: BitMine, July 27, 2025
The price of DAT can be broken down into the product of three factors: (a) the number of tokens per share (b) the token price (c) the NAV multiplier (mNAV).
At the end of June, BitMine's stock price was $4.27 per share, approximately 1.1 times the initial DAT financing NAV of $4 per share. A little over a month later, the stock price soared to $51 per share, about 1.7 times the estimated NAV of $30 per share.
Of the 1100% increase this month, about 60% came from EPS growth (330%), 20% from the rise in ETH price (from $2500 to $4300), and 20% from mNAV expansion (1.7 times).
This indicates that the core driving force behind BitMine's stock price increase is the growth in per-share ETH holdings (EPS), which is the core engine controllable by management and is also key to differentiating DATs from simply holding spot assets.
The third factor we have yet to discuss is the NAV multiplier (mNAV).
Naturally, one might ask: why would someone be willing to purchase DATs' stocks at a price higher than the net asset value (NAV)?
Here, one can draw an analogy to financial institutions like banks that operate based on their balance sheets: banks generate income through assets, and investors are willing to assign valuation premiums to those banks believed to sustain returns above their cost of capital.
The trading price of high-quality banks often exceeds their net asset value (or book value), for example, JPMorgan (JPM) has a price-to-book ratio of over 2 times. Similarly, if investors believe that a certain DAT can continuously enhance its per-share net asset value, they may be willing to value it at a price higher than NAV.
We believe that BitMine's monthly net asset growth of approximately 640% per share is sufficient to support its NAV multiplier premium.
Whether BitMine can continue to execute its strategy remains to be seen, and challenges are inevitable along the way. However, its management team and performance record to date have attracted support from traditional financial giants such as Stan Druckenmiller, Bill Miller, and ARK Invest. We expect that, as shown in the development history of Strategy, the growth potential of high-quality DATs will gain recognition from more institutional investors.
