Pantera: Value Creation of DAT Using BitMine as an Example

Author: Cosmo Jiang, General Partner at Pantera Capital, Erik Lowe, Content Director at Pantera Capital; Translated by: Golden Finance

Our investment theme in Digital Asset Treasury Company (DAT) is based on a simple premise:

DAT can generate income to increase the value of net assets per share, thereby creating more underlying token ownership over time rather than just holding spot.

Therefore, owning DAT can provide higher return potential compared to holding tokens directly or through an ETF.

Pantera has deployed over $300 million in DAT across various tokens and regions. These DAT are leveraging their unique advantages, adopting strategies to increase their digital assets on a per-share appreciation basis. Below is an overview of our DAT portfolio.

BitMine Immersion (BMNR) is the first investment of the Pantera DAT Fund, embodying a company with a clear strategic roadmap and strong execution leadership. Fundstrat Chairman Tom Lee elaborated on BitMine's long-term vision of acquiring 5% of the total supply of ETH - which they call "5% Alchemy." We believe that discussing the value creation of a highly effective DAT, using BMNR as an example, will be very beneficial.

BitMine Case Study

Since BitMine launched its treasury strategy, it has become the world's largest ETH treasury and the third largest DAT (after Strategy and XXI), holding a total of 1.15 million ETH, valued at 4.9 billion USD (as of August 10, 2025). BMNR is also ranked 25th in U.S. liquidity, with a daily trading volume of 2.2 billion USD (based on the five-day moving average benchmark as of August 8, 2025).

optimistic about Ethereum

The most important factor for the success of DAT lies in the long-term investment value of its underlying token. BitMine's DAT is based on the view that as Wall Street moves on-chain, Ethereum will become one of the biggest macro trends of the next decade. As we wrote in last month's blockchain investor letter, the on-chain migration is underway as the growing importance of tokenization innovations and stablecoins continues to emerge (see Golden Finance's previous article: The On-Chain Migration of Tokenization). Currently, there are $25 billion of real-world assets on public chains—additionally, there are $260 billion in stablecoins, which are currently the 17th largest holder of U.S. Treasury bonds.

"Stablecoins have become the ChatGPT story of the cryptocurrency space." – Tom Lee, Chairman of BitMine, Pantera DAT Call, July 2, 2025

Most of these activities take place on Ethereum, which allows ETH to benefit 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 the demand for ETH accumulation.

per share ETH growth

After determining the investment value of the base token, DAT's business model is to maximize its per-share token holdings. The main methods to increase per-share token holdings are as follows:

1. Issue shares at a price higher than the net asset value ("NAV") per token.

2. Issue convertible bonds and other securities linked to stocks to monetize the volatility of stocks and underlying tokens.

3. Generate staking rewards, DeFi earnings, and other operational income to acquire more tokens. It is important to note that this is an additional leverage provided by ETH and other smart contract tokens DAT, while the original Bitcoin DAT, including Strategy, does not possess this.

4. Acquire another DAT whose trading price is close to or below NAV.

From this perspective, since the launch of the ETH treasury strategy, BitMine's value per share of ETH (also known as "earnings per share") has grown at an astonishing rate in the first month, far exceeding the growth rate of other DATs. The value of ETH accumulated by BitMine in the first month even surpassed the value accumulated by Strategy (formerly Microstrategy) in the first six months of executing that strategy.

BitMine mainly increases earnings per share by issuing stocks and generating staking rewards. We believe that BitMine may soon expand its range of convertible bonds and other instruments.

Source: BitMine, July 27, 2025

Value Creation Action

The DAT price can be broken down into three components: (a) the token price per share, (b) the base token price, and (c) the asset net value multiple ("mNAV").

At the end of June, the trading price of BMNR was $4.27 per share, approximately 1.1 times its net asset value of $4 per share at the time of its initial DAT financing. Just over a month later, the stock closed at $51, about 1.7 times its estimated net asset value of $30 per share. This means the stock price increased by 1100% in just over a month, of which: (a) earnings per share grew approximately 330%, contributing about 60% to the increase; (b) the price of ETH rose from $2500 to $4300, contributing about 20% to the increase; (c) the net asset value expanded to 1.7 times, contributing about 20% to the increase.

This means that the majority of the increase in BMNR's stock price is driven by the growth of each ETH, which is the core engine controlled by the management, distinguishing DAT from merely holding spot ETH.

The third factor we have not yet discussed is mNAV. Naturally, one might ask: why would someone buy DAT at a price higher than its net asset value? I find it helpful to draw an analogy here with financial businesses based on balance sheets (including banks). Banks seek returns on assets, and investors are willing to pay a valuation premium for those banks that they believe can consistently generate returns above the cost of capital. The best banks trade at prices above their net asset value (or book value); for example, JPMorgan's valuation is twice its net asset value. Similarly, if investors believe that DAT can consistently achieve per-share net asset value growth, they may also choose to value it at a premium above its net asset value. We believe that BMNR's NAV has grown approximately 640% quarter-on-quarter, which is sufficient to justify the mNAV premium.

BitMine's ability to execute its strategy will manifest over time, and it will inevitably face challenges along the way. BitMine's management team and its track record to date have attracted support from traditional financial giants, including Stan Druckenmiller, Bill Miller, and ARK Invest. We expect BitMine to be favored by more institutional investors as a premium DAT growth story, similar to Strategy.