Digital-Asset Treasury Companies Continue to Accumulate Crypto. But Are Any of Them Worth Buying?
These companies work best when the prices of their underlying assets are rising rather than falling.
Overview
Two big digital-asset treasury (DAT) companies kept buying their target cryptocurrencies in the week of June 14, even as the value of their holdings slid further and further. Strategy (NASDAQ: MSTR) added 520 Bitcoin tokens for $35 million, expanding its hoard to 847,363, and Bitmine Immersion Technologies (NYSE: BMNR) bought 52,203 Ethereum for $92 million.
The pitch from each business is the same as ever: They're happy to accumulate these assets while they're on sale because they're confident that in the long run it will turn out to be a good decision. But that's a very different issue than whether to buy these stocks yourself, so let's get some clarity on that.
Details
It makes sense to buy digital-asset treasury companies when their stocks trade above the value of the crypto on the balance sheet. That gap, as measured by the market value to net asset value (mNAV), is what makes the entire DAT business model work (when it does).
Source
Originally published at www.fool.com.