The truth behind mNav falling below 1: Why is the DAT financing company in trouble?

In 2025, the concept of crypto treasuries (DAT) was once considered the next big trend, but the landscape has changed dramatically. Following recent adjustments in Bitcoin and Ethereum, many early-stage financing firms have faced dual blows to valuation and holdings. The most stark data is right in front of us—over 12 leading DAT companies’ mNav has fallen below 1, including the “godfather” of this track, Strategy.

From Glory to Shadow: Why Did 12 Companies Fail Collectively?

mNav is a core indicator measuring the health of crypto treasury companies, calculated as the company’s market cap divided by the value of its held crypto assets. When mNav drops below 1, it indicates that the market valuation of the company is less than the value of its held assets—this is a dangerous signal in financing logic.

The BTC Treasury Dilemma First Emerged

Strategy currently holds 641,692 BTC, valued at $65.04 billion, but its market cap is only $63.67 billion, with an mNav of 0.979—an awkward situation for an industry giant. As a pioneer in financing companies, Strategy still insists on small incremental increases, but the market has responded coldly.

Metaplanet’s situation is even more alarming. This financing firm holds 30,823 BTC (worth $3.124 billion), yet its stock market value has fallen to $3.024 billion, with an mNav of 0.968. To save itself, it even used its Bitcoin holdings as collateral to borrow $100 million for secondary buybacks and stock repurchases—this “nested” operation exposes its heavy reliance on financing.

Smaller financing firms like Empery Digital and Sequans Communications are in worse shape. Empery Digital holds 4,081 BTC but has a market value of only $246 million, with an mNav of 0.595, desperately executing an $80 million stock buyback to boost valuation. Sequans Communications is even more aggressive—selling 970 BTC to redeem 50% of its convertible bonds, reducing total debt from $189 million to $94.5 million.

Ethereum Treasuries: Selling Can’t Save Them

On the Ethereum side, Bitmine Immersion Tech holds 3.529 million ETH (assets valued at $12.07 billion), but its market cap is only $11.43 billion, with an mNav of 0.946. Firms like SharpLink Gaming and BTCS Inc. have mNavs dropping to 0.84 and 0.6 respectively.

The most ironic case is ETHZilla—it sold $40 million worth of ETH in October to buy back stock, hoping to push mNav above 1. But what happened? The stock price fell even faster than ETH itself, and now mNav remains stuck at 0.82, with no way to turn the tide.

The Fundamental Dilemma of the DAT Model: Financing Trap or Future?

To understand why so many financing companies are failing simultaneously, we must clarify the business logic of DAT.

These firms operate on a “compound cycle”: issuing bonds or stocks → financing to buy crypto assets → asset appreciation drives market cap up → issuing more bonds at higher valuation → buying more crypto assets → cycle repeats. The entire model relies on “crypto assets continuously appreciating.”

But when BTC and ETH prices stagnate or decline, this cycle immediately reverses: assets shrink → company market cap drops → financing ability diminishes → unable to repay debts or buy more → forced asset sales → further market downturn → stock prices continue falling. This becomes a “double kill” of falling coin prices vs. falling stock prices.

For large-scale, well-capitalized firms like Strategy, this may not be an immediate concern. Michael Saylor has publicly stated he will never sell BTC, and the company enjoys strong credibility in capital markets. But even so, crypto market analyst Willy Woo warns—Strategy’s approximately $1.01 billion in debt matures in September 2027. To avoid being forced to sell BTC to repay debt, Strategy’s stock price must stay above $183.19 (equivalent to a BTC price of $91,502, assuming mNav is 1). This threshold isn’t unreachable, but once broken, the biggest taboo for financing firms—selling crypto assets—becomes unavoidable.

The Asset Sale Dilemma: Financing Firms Start Self-Rescue but with Limited Effect

The reality has already provided an answer. Sequans Communications and ETHZilla have both embarked on this irreversible path—selling crypto assets to ease liquidity crunches. But each sale damages market sentiment, accelerating stock price declines and creating a vicious cycle.

This is the ultimate paradox for DAT financing companies:

• Not selling assets → debts become unpayable, financing ability diminishes
• Selling assets → stock prices often fall faster than asset prices, making mNav even harder to recover to 1

For small and medium-sized financing firms lacking strong financing capacity, the final outcome is either forced to sell assets at deep discounts or be acquired by giants like Strategy or Tom Lee—“diamond hands” investors. Regardless of the result, retail investors will be left behind.

Market Response and Future Outlook

Notably, recent rumors suggest top institutions (including Ark, BlackRock, Vanguard Group, JPMorgan, etc.) have started buying into firms like BitMine and other DAT stocks. This has provided some reassurance to anxious investors.

If DAT financing companies can endure the current valuation “ice age,” and Wall Street’s asset management giants gradually accept these assets, the market landscape could be rewritten. But how long will that take? No one can give a definitive answer. During this “waiting period,” how many firms will be forced to sell crypto assets due to cash flow or debt pressures? This will directly impact overall market liquidity and price trends.

Currently, the DAT industry is no longer a “sure profit” story but a contest of capital strength and financing capability. The plight of small and medium firms reflects the brutal “clearing phase” this track is experiencing—only those with strong financing channels, ample cash reserves, and low debt ratios will make it to the end.