Written by: Cosmo Jiang, Erik Lowe
Translated by: TechFlow
Our investment theory for Digital Asset Treasuries (DATs) is based on a simple assumption:
DATs can increase per-share net asset value by generating returns, thereby accumulating more token holdings over time, rather than just holding spot positions.
Therefore, investing in DATs potentially offers higher return potential compared to directly holding tokens or holding tokens through exchange-traded funds (ETFs).
Pantera has invested over $300 million in Digital Asset Treasuries (DATs) across different tokens and regions. These DATs leverage their unique advantages to expand their digital asset holdings through strategic operations that increase value per share. Here is a brief overview of our DAT portfolio coverage.
BitMine Immersion (BMNR) is the first investment of the Pantera DAT Fund, exemplifying a company with a clear strategic plan and execution capability. Tom Lee, chairman of Fundstrat, articulated BitMine's long-term vision—acquiring 5% of total ETH supply, a goal dubbed the "5% Alchemy". We believe analyzing the BMNR case provides meaningful insights into how an efficiently operated Digital Asset Treasury (DAT) creates value.
BitMine (BMNR) Case Study
Since launching its capital management strategy, BitMine has become the world's largest ETH fund manager and the third-largest DAT (behind Strategy and XXI), holding a total of 1,150,263 ETH valued at $4.9 billion as of August 10, 2025. Additionally, BMNR ranks 25th in US liquidity, with an average daily trading volume of $2.2 billion (based on the five-day average as of August 8, 2025).
Ethereum Case
The most critical factor for DAT success lies in the long-term investment value of its underlying token. BitMine's DAT strategy is based on a core argument: as Wall Street transitions onchain, Ethereum will be one of the largest macro trends in the next decade. As we wrote last month, "The Great Onchain Migration" is underway, with the importance of tokenization innovation and stablecoins increasingly prominent.
Currently, $25 billion of real-world assets exist on public blockchains—additionally, there are $260 billion in stablecoins, which collectively have become the 17th largest holder of US Treasury bonds.
"Stablecoins have become the ChatGPT story of the crypto space."
– Tom Lee, BitMine Chairman, Pantera DAT Call, July 2, 2025
Most of these activities occur on Ethereum, which positions ETH to benefit from growing block space demand. As financial institutions increasingly rely on Ethereum's security to support their operations, they will be incentivized to participate in the Ethereum Proof-of-Stake network—further driving demand for ETH accumulation.
Per-Share ETH Quantity Growth ("EPS")
After establishing the investment value of the underlying token, the core business model of a Digital Asset Treasury (DAT) is maximizing per-share token quantity growth. Here are the primary methods to increase per-share token quantity:
- Issue stocks at a premium to token net asset value ("NAV").
- Issue convertible bonds and other equity-linked securities to monetize stock and underlying token volatility.
- Acquire more tokens through staking rewards, DeFi yields, and other operational income. Note that this is an additional advantage unique to ETH and other smart contract token treasuries, which early Bitcoin treasuries (like Strategy) did not possess.
- Acquire other digital asset treasuries trading near or below net asset value (NAV).
In this regard, BitMine has grown its per-share ETH earnings ("EPS") at a remarkable speed in the first month since launching its ETH treasury strategy.
TechFlow note: Earnings Per Share, EPS, refers to the net profit per ordinary share), far exceeding other Digital Asset Treasuries (DATs). In comparison, BitMine accumulated ETH quantities in its first month that surpass the total amount Strategy accumulated in its first six months executing a similar strategy.
BitMine primarily increases per-share quantity by issuing stocks and generating staking rewards, and we anticipate BitMine will likely expand its tool menu in the near future, issuing convertible debt and other financial instruments.
Source: BitMine Company Presentation, July 27, 2025
Value Creation Actions
The price of a Digital Asset Treasury (DAT) can be broken down as the product of three components: (a) per-share token quantity, (b) underlying token price, and (c) net asset value multiple ("mNAV").
As of the end of June, BMNR's stock price was $4.27 per share, approximately 1.1 times its initial DAT financing NAV of $4. Just over a month later, the stock closed at $51, about 1.7 times its estimated NAV of $30.
This means the stock price rose 1,100% in just over a month, wherein: (a) per-share token quantity (EPS) grew approximately 330%, contributing about 60% of the increase; (b) ETH price rose from $2,500 to $4,300, contributing about 20% of the increase; (c) mNAV expanded to 1.7 times, contributing about 20% of the increase.
This indicates that BMNR's significant stock price surge was primarily driven by growth in its per-share ETH quantity (EPS). This is a core driving factor manageable by leadership and the fundamental difference between Digital Asset Treasuries (DATs) and simply holding spot.
The third factor we have not yet explored deeply is the net asset value multiple (mNAV). Naturally, one might ask: Why would someone purchase a Digital Asset Treasury (DAT)'s net asset value (NAV) at a premium?
Here, it can be compared to asset-based financial businesses, including banks. Banks generate earnings from assets, and investors grant valuation premiums to banks that can consistently create returns above capital costs. For instance, the highest-quality banks typically trade at premiums above net asset value (NAV) or book value, such as JPMorgan at over 2 times valuation.
Similarly, if investors believe a DAT can consistently grow its per-share net asset value (NAV), they might be willing to value that DAT at a premium. We believe BMNR's monthly per-share NAV growth of approximately 640% sufficiently justifies its mNAV premium.
BitMine's ability to consistently execute its strategy will be verified over time and will inevitably face challenges. BitMine's management team and its performance to date have attracted heavyweight supporters from traditional finance, including Stan Druckenmiller, Bill Miller, and ARK Invest. We anticipate that the growth story of the highest-quality DATs will attract more institutional investors, similar to Strategy.
