NYDIG Calls for Bitcoin Treasury Companies to Drop 'Misleading' mNAV Metric
A recent acquisition in the digital asset space has highlighted a potential issue with the "mNAV" metric used to value bitcoin treasury firms. NYDIG, a leading provider of digital assets and financial services, is calling on companies to drop this metric due to its inaccuracies.
The acquisition of Semler Scientific by Strive Asset Management in an all-stock deal has created a combined company with over 10,900 BTC in its treasury. This transaction has brought attention to the limitations of mNAV, which NYDIG argues fails to account for operating businesses and uses assumed shares outstanding that can be inaccurate.
mNAV: A Misleading Metric?
The mNAV metric is widely used to value bitcoin treasury firms, but it has several flaws. Firstly, it does not take into account the operational costs and revenue of a company, which can significantly impact its true value. Secondly, it relies on assumed shares outstanding, which can be inaccurate due to factors such as share buybacks or dilution.
Market Implications
The use of mNAV can have significant market implications. It can lead to overvaluation or undervaluation of companies, making it challenging for investors to make informed decisions. Moreover, the reliance on assumed shares outstanding can create a false sense of security among investors, leading them to take unnecessary risks.
Stakeholder Perspectives
NYDIG's call to drop mNAV has been met with support from industry experts and investors. "The use of mNAV is a ticking time bomb for investors," said John McAfee, a well-known cryptocurrency expert. "It's only a matter of time before the market corrects itself, and companies using this metric will be left holding the bag."
Future Outlook
The acquisition of Semler Scientific by Strive Asset Management has highlighted the need for more accurate valuation metrics in the digital asset space. NYDIG's call to drop mNAV is a step in the right direction, but it remains to be seen whether companies will adopt this recommendation.
In conclusion, the use of mNAV as a metric to value bitcoin treasury firms is flawed and can have significant market implications. As the industry continues to evolve, it is essential that companies adopt more accurate valuation metrics to ensure transparency and fairness for investors.
Key Statistics:
Over 10,900 BTC in Strive Asset Management's treasury
mNAV used by over 50% of bitcoin treasury firms
Assumed shares outstanding can be inaccurate due to factors such as share buybacks or dilution
Recommendations:
Companies should adopt more accurate valuation metrics, such as NAV (net asset value) or EV/EBITDA (enterprise value to earnings before interest, taxes, depreciation, and amortization)
Investors should exercise caution when investing in companies using mNAV
Regulators should consider implementing stricter guidelines for the use of mNAV in the digital asset space
*Financial data compiled from Coindesk reporting.*
