A month ago, I published an article highlighting an opportunity for investors to profit by buying the discount to NAV offered by digital asset companies, or crypto treasury stocks. If you didn’t catch it, the article is linked below:
Digital asset treasury stocks are supposed to track the coins they hold. Lately, some of them have done better than that.
The catch-up trade works when three things line up. The stock starts cheap relative to holdings. The underlying asset rises. Equity investors re-rate the wrapper. This is the opportunity that we identified and shared with investors a month ago (earlier for premium members).
A month ago we argued that discounted DAT stocks could outrun the coins they hold if crypto turned up and the NAV gap closed. Here is the one-month scorecard.
Company | Stock | Token | Spread |
|---|---|---|---|
Strategy (MSTR) | 24% | 7% (BTC) | 14 points |
Strive (ASST) | 33% | 7% (BTC) | 26 points |
Sharplink (SBET) | 16% | 10% (ETH) | 6 points |
DeFi Dev (DFDV) | 12% | 10% (ETH) | 2 points |
Forward Ind (FWDI) | 45% | 14% (SOL) | 31 points |
StablecoinX (USDE) | 155% | 60% (ENA) | 95 points |
Hyperliquid Strat (PURR) | 4% | 6% (HYPE) | -2 points |
SVRN (SVRN) | 595% | 165% (NEAR) | 430 points |
xTAO (XTAIF) | 55% | 29% (TAO) | 26 points |
SUI Group Holdings (SUIG) | 69% | 56% (SUI) | 13 points |
9 out of the 10 digital asset treasury stocks outperformed the underlying token that they hold. Only PURR underperformed versus the underlying asset in the past month. Over 3 months, PURR has outperformed by a small margin.
In previous articles, I suggested that the crypto sector was near a bottom and shared that I had started increasing exposure for subscribers in our Crypto Corner portfolio.
If you simply bought a basket of the cryptocurrencies mentioned above when the last article was published, you would be up 36% in just the past month. Not bad.
But if you bought a basket of the digital asset treasury stocks shown above, you would have doubled your money in the same time period (up 100%)!
SVRN pulled that average hard. Ex-SVRN, the other nine still doubled the crypto tokens' gains, averaging about 45% versus about 22% for an equal-weight basket of the coins (excluding TAO). But SVRN is one of the few positions that we added to the Nicoya Research portfolio, so we have managed to outperform the wider basket.
DAT stocks can beat their coins when they are discounted, and crypto turns up. But they are not a free leveraged claim on the asset. They add dilution, preferred dividends, operating costs, and equity-market mood. Over a quarter, that package can look like alpha. Over a cycle, the coin has usually been the cleaner trade.
As usual, timing is everything. The opportunity to generate such highly leveraged gains from DATs has likely passed. The risk-reward is certainly less attractive than it was a month ago.
But we continually scan for opportunities like this and try to move ahead of the herd. If you would like our top crypto picks and access to our Discord chat room to follow along when we buy or sell, you can upgrade to our premium membership.
In addition to crypto, we also cover the commodity sector (metals, mining, energy) and the technology sector (AI, robotics, biotech, etc.). At Nicoya Research, we have a track record of outperforming in the sectors that we cover and helping subscribers increase their portfolio returns. In most cases, the small investment in our research pays for itself many times over. You can get started for just $395.
Cheers,
Jason Hamlin, Founder, Nicoya Research
