Pantera: Value creation of DAT: Taking BitMine as an example

By Cosmo Jiang, General Partner, Pantera Capital, and Erik Lowe, Head of Content, Pantera Capital; Translated by Golden Finance

Our investment thesis for digital asset treasury companies (DATs) is based on a simple premise:

DATs can generate income that increases net asset value per share, thereby generating more ownership of the underlying token over time rather than simply holding physical assets.

Therefore, owning DATs offers higher return potential compared to holding the tokens directly or through an ETF.

Pantera has deployed over $300 million in DATs across a variety of tokens and regions. These DATs are leveraging their unique advantages and employing strategies to accumulate their digital assets through per-share appreciation. Below is an overview of our DAT portfolio. BitMine Immersion (BMNR), the Pantera DAT Fund's first investment, embodies a company with a clear strategic roadmap and strong execution leadership. Fundstrat Chairman Tom Lee has outlined BitMine's long-term vision of acquiring 5% of the total ETH supply—what they call "5% Alchemy." We believe it's useful to explore the value creation of a DAT with strong execution, using BMNR as an example. Since launching its treasury strategy, BitMine has become the world's largest ETH treasury and the third-largest DAT (after Strategy and XXI), holding 1.15 million ETH worth $4.9 billion (as of August 10, 2025). BMNR is also the 25th most liquid stock in the US, with $2.2 billion in daily trading volume (based on a five-day moving average as of August 8, 2025). The most important factor in the success of DATs lies in the long-term investment value of their underlying tokens. BitMine's DAT is based on the view that Ethereum will become one of the biggest macro trends of the next decade as Wall Street shifts to on-chain. As we wrote in last month's blockchain investor letter, a major on-chain migration is underway as tokenized innovation and the growing importance of stablecoins continue to emerge (see Jinse Finance's previous article: The Tokenized On-Chain Migration). Currently, $25 billion in real-world assets exist on public blockchains—in addition to $260 billion in stablecoins, which are currently the 17th largest holder of US Treasuries. "Stablecoins have become the ChatGPT story of crypto." – Tom Lee, Chairman of BitMine, Pantera DAT Call, July 2, 2025. Much of this activity is occurring on Ethereum, which has benefited from the growing demand for block space. As financial institutions increasingly rely on Ethereum's security to support their operations, they will be incentivized to participate in its POS network, further driving demand for ETH. ETH Per Share Growth After determining the investment value of the underlying token, the DAT's business model is to maximize the token holdings per share. The primary methods for increasing token holdings per share include: 1. Issuing shares at a price above the net asset value (NAV) per token. 2. Issuing convertible bonds and other equity-linked securities to monetize volatility in the shares and the underlying token. 3. Generating staking rewards, DeFi yields, and other operating income to acquire more tokens. It's important to note that this is an additional leverage offered by ETH and other smart contract token DATs, but not by native Bitcoin DATs, including Strategy. 4. Acquire another DAT trading near or below its NAV. To put this in perspective, BitMine's ETH per share value (also known as "earnings per share") has grown at an astonishing rate in the first month since launching its ETH treasury strategy, far exceeding the growth rates of other DATs. The ETH value accumulated by BitMine in its first month even exceeded the value accumulated by Strategy (formerly Microstrategy) in the first six months of executing the strategy. BitMine primarily increases its earnings per share through issuing equity and generating staking rewards, and we believe BitMine may soon expand its offerings to include convertible bonds and other instruments. The DAT price can be decomposed into three components: (a) per token, (b) base token price, and (c) net asset value multiple (“mNAV”). At the end of June, BMNR was trading at $4.27 per share, approximately 1.1x its net asset value of $4 per share at its initial DAT funding round. Just over a month later, the stock closed at $51, approximately 1.7x its estimated net asset value of $30 per share. This represents an 1,100% increase in the stock price in just over a month, of which: (a) EPS growth of approximately 330%, contributing approximately 60%; (b) the increase in ETH price from $2,500 to $4,300, contributing approximately 20%; and (c) the expansion of NAV to 1.7x, contributing approximately 20%. This means that the vast majority of BMNR's share price increase has been driven by growth in ETH per share, the core engine of management's control that distinguishes DATs from simply owning spot ETH. The third factor we haven’t explored above is mNAV. Naturally, one might ask: why would anyone buy DAT at a price above its net asset value? I find it helpful to draw an analogy here with balance-sheet-based financial businesses, including banks. Banks seek returns on their assets, and investors assign a valuation premium to banks they believe can consistently generate returns above their cost of capital. The highest-quality banks trade at a premium to net asset value (or book value); for example, JPMorgan Chase trades at over 2x its NAV. Similarly, if investors believe a DAT can consistently grow its net asset value per share, they may choose to value it at a premium to NAV. We believe BMNR's NAV growth of approximately 640% month-over-month justifies the mNAV premium. BitMine's ability to consistently execute on its strategy will be evident over time, and will inevitably face challenges along the way. BitMine's management team and its track record to date have attracted support from leading traditional financial institutions, including Stan Druckenmiller, Bill Miller, and ARK Invest. We expect BitMine's growth story as a top-quality DAT will attract more institutional investors, similar to Strategy.