In late September 2025, the crypto analytics and investment firm NYDIG, via its global head of research Greg Cipolaro, issued a strong critique of a valuation staple in the Bitcoin-treasury firm space: mNAV (market value to net asset value, sometimes “multiple of NAV”). NYDIG argues that the metric is misleading at best, and fundamentally broken at worst, and that the industry should abandon it.
Cipolaro’s core contention is that mNAV fails to capture the full economic complexity of crypto treasury companies, oversimplifies capital structure, and distorts investor behavior. The statement is not just theoretical — it arrives when many such firms are showing compressed valuation multiples, issuing convertible securities, and in some cases struggling to raise capital on favorable terms.
What Is mNAV, and Why It Became Popular
Before dissecting its flaws, it’s useful to understand why mNAV gained traction:
- Definition & usage
mNAV is usually defined as the ratio of a company’s (fully diluted) market capitalization to the net value of its crypto holdings (often Bitcoin or a crypto basket). If mNAV > 1, the market is placing a “premium” on the company beyond simply owning crypto; if < 1, the company is trading at a “discount” to its crypto reserves. - The “flywheel” logic
The appeal of mNAV comes from a reflexive growth story: a company whose shares trade at a premium (i.e. mNAV > 1) can issue equity (or convertible instruments) to raise capital and buy more crypto, thereby increasing its net asset base per share. This, in turn, can justify further premium expansion—thus a positive feedback loop.
Conversely, if the premium erodes, the flywheel reverses and dilution pressures may kick in. - Simple heuristics for investors
For many investors, mNAV has served as an easy shortcut: “Compare market price to crypto backing, and decide whether the stock is cheap or expensive relative to its reserves.”
Thus, for a time, mNAV became a focal benchmark in evaluating crypto treasury firms, particularly those heavily weighted in Bitcoin.
Why the Critique: The Flaws in mNAV
NYDIG’s critique is trenchant and multi-pronged. Below are the main arguments against continued reliance on mNAV:
1. Ignores non-crypto operations and ancillary assets
Many treasury companies are not mere “holding companies” of Bitcoin. They may have software businesses, licensing, services, or other operating divisions. mNAV tends to focus only on the crypto side and overlooks the value of operating businesses — which means it understates real enterprise value for firms with diversified operations.
In other words: if a treasury company is doing more than just buying Bitcoin, mNAV can misrepresent its true worth.
2. Mis-treatment of convertible instruments and assumed share count
A major structural issue arises from how mNAV accounts for outstanding shares. Many crypto treasury firms issue convertible debt or convertible preferred instruments, which may or may not be converted into equity depending on conditions. mNAV often assumes full dilution—i.e. that all convertibles will convert into shares. But in reality, those holders may demand cash, refuse conversion, or trigger complex settlement terms.
Thus, treating convertible debt as guaranteed equity dilution can overstate share count, understate per-share NAV, or distort the metric. Furthermore, the risk of cash settlement is real and introduces liabilities not visible in mNAV.
3. Leverage, liabilities, and hidden risks
mNAV tends to treat only the crypto holdings and share count, but may ignore debt, margin, derivatives, counterparty risk, or off-balance sheet liabilities. Crypto treasuries often employ leverage, borrowing, derivatives hedges, or yield strategies; these can move sharply in volatile market conditions, which mNAV doesn’t fully capture.
4. Fragile reflexivity: the “death spiral” risk
Because mNAV fuels a feedback loop, when Bitcoin prices fall or market sentiment turns, that positive feedback can reverse. The premium shrinks, making it harder to raise capital, which forces dilution or asset sales, further depressing the premium—leading to a spiral of devaluation. In other words, mNAV’s self-reinforcing growth logic can flip into a negative spiral in stress periods.
5. Inconsistent methodology and opacity
There is no uniform standard for how to compute mNAV. Some analysts use “current share count,” others use “maximum dilution,” still others use pro forma assumptions. The lack of consensus and transparency makes cross-company comparisons tricky, and allows selective framing by promoters.
Because of these issues, Cipolaro asserts that the industry’s definition of mNAV “needs to be deleted and forgotten.” It’s not just flawed in edge cases — in his view, it fundamentally misleads investors.
Market Reactions and the Broader Context
The criticism of mNAV comes amid a broader recalibration in the Bitcoin treasury company space.
- Valuation compression
Many publicly traded treasury firms are trading at mNAV ratios well below historical peaks. Some are trading below 1x (i.e., market cap < crypto holdings), meaning investors are discounting their non-crypto operations (if any) or assessing risk premiums. This compression puts stress on the issuance model. - Consolidation and M&A moves
One prominent recent deal cited in the debate is the acquisition of Semler Scientific by Strive. In that transaction, Semler shareholders receive 21.05 shares of Strive for one Semler share. Post-merger, Strive’s NAV per share is projected to rise (from ~$1.14 to ~$1.32, per NYDIG’s note). But the ultimate valuation will hinge on investor willingness to apply a premium or discount to NAV.
The deal underscores how firms are already shifting strategy to navigate weak mNAV dynamics. - Capital markets stress
The ability to issue new shares under favorable terms is weakening. With mNAV under pressure, new rounds may demand steeper discounts, counterproductive dilution, or even failure to raise. That heightens liquidity risk for smaller or overleveraged players. - Regulation, accounting, and investor scrutiny
As this class of firms matures, regulatory bodies and traditional finance are paying more attention to their disclosures, accounting treatments, and business models. Given the complexity of crypto treasuries, the old shortcuts (like mNAV) may not stand regulatory or institutional scrutiny.
In sum, the call to retire mNAV is not a fringe opinion — it aligns with a market that is demanding higher discipline, more transparency, and valuation frameworks that incorporate fundamentals, risk, and capital structure, not just crypto asset backing.
What Could Replace mNAV? Toward More Nuanced Metrics
If mNAV is on the way out (or should be), what should investors and analysts use instead? Some emerging alternatives or augmented metrics include:
- Enterprise Value / Adjusted NAV
Rather than a pure market-to-crypto ratio, use an enterprise value (market cap + debt – cash) relative to net asset value (crypto holdings + other assets – liabilities). This brings debt, non-crypto operations, and capital structure into the valuation. - “Bitcoin per share” growth trajectory
Rather than focusing on current premium, measure how fast the company is expanding its Bitcoin holdings per fully diluted share over time, adjusted for dilution, costs, yield generation, and leverage. - Yield / return on assets
If the treasury firm can generate yield (e.g. via lending, staking, options, interest income), then metrics like return on invested capital (ROIC) or yield on crypto assets become relevant. If the firm can monetize its assets, that provides a valuation anchor. - Liquidity, funding, and stress scenario modeling
Stress-testing the impact of a 20–50 % drawdown in Bitcoin price, margin calls, derivative exposures, or convertible repayment obligations can reveal downside risks that mNAV ignores. - Transparent share dilution modeling
Instead of “assumed full dilution,” use scenario modeling: ranges of potential dilution, conversion triggers, cash vs equity settlement, and their probabilities. Show low/medium/high cases. - Segmented valuation: OpCo vs Treasury arm
Break valuation into the operating business (if any) and the crypto treasury arm, each valued separately, then sum. This avoids the oversimplification that the entire value is driven by crypto holdings.
Some of these ideas have already been floated by NYDIG and others as part of the “beyond mNAV” discussion. The shift is toward more bottom-up, risk-aware, capital-structure aware valuation frameworks.
Key Takeaways & What to Watch
- mNAV is under serious challenge. What was once a handy shorthand is now being questioned at the highest levels of crypto finance.
- Investors must adapt. Relying solely on mNAV will likely lead to blind spots—especially in downturns or for firms with non-crypto operations or complex capital structures.
- Capital raising will be harder. Without the premium cushion implied by mNAV, many treasury firms may need to raise capital at steeper discounts or more onerous terms.
- Consolidation ahead. Firms with weaker balance sheets or weak structural defensibility may be pushed to merge, restructure, or liquidate.
- Regulation & accounting scrutiny intensify. Transparent disclosures, rigorous accounting, and credible stress testing will separate credible firms from speculative ones.
In short: the era of “just hold Bitcoin and borrow to double down” is giving way to a more mature stage in the crypto treasury sector, where valuation will need to be grounded in fundamentals, balance sheet discipline, and realistic growth models—not just the backing of Bitcoin holdings and hope for a premium multiple.
