😵‍💫 mNAV Madness

FIRE BTC Issue #33 - Bitcoin treasury companies and the premium you pay

As bitcoiners, we use bitcoin as the denominator.

It’s how we measure success. It’s our unit of account.

As such, bitcoin’s appreciation provides the hurdle rate any investment has to clear to even be worth considering.

That means our goal isn’t just to grow our net worth in dollars. It’s to grow our bitcoin stack and the value of our net worth measured in BTC. So unless an investment can outperform bitcoin—and compensate us for the extra risk—we’re better off just holding bitcoin instead.

Enthusiasm around bitcoin treasury companies like Strategy (MSTR), Metaplanet (MTPLF), and Semler Scientific (SMLR) has been growing. And for good reason. The stocks of these companies give people a form of levered exposure to bitcoin.

Because of leverage and other company-specific factors, the market values these businesses differently than their bitcoin holdings. Right now, that usually means paying a premium.

That premium is called mNAV. It’s the single most important metric to understand if you’re buying these stocks. And it can make or break your returns relative to just holding bitcoin.

This issue will show you how it works, why it matters, and what it means for your stack.

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🤓 What is mNAV?

mNAV stands for multiple of net asset value.

It gives you a measure of how much the market is valuing a company compared to the value of the bitcoin it holds. To calculate it, you take the company’s enterprise value—which is its market cap plus debt minus cash—and divide it by the value of its bitcoin stack.

For example, if a company holds 10,000 BTC and the price of bitcoin is $100,000 per coin, that’s $1 billion in bitcoin. If the company’s enterprise value is $2 billion, then its mNAV is 2.0. That means you’re paying twice what the bitcoin is worth on a per-share basis.

An mNAV above 1 means the company is trading at a premium to its bitcoin holdings. An mNAV below 1 means it’s trading at a discount. If the mNAV is 1 exactly, you’re paying dollar-for-dollar for the BTC, with no premium or discount baked in.

mNAV isn’t fixed. It moves based on how the market feels about the company and its future. If investors expect the company to keep stacking bitcoin—especially if it’s using leverage—they’ll often pay a higher multiple. If the company has strong leadership, access to cheap capital, or simply a good story, that can push the premium even higher. In bull markets, excitement and speculation can drive mNAVs to stretch far beyond 1. In bear markets, the opposite happens—premiums collapse, and the stocks can lag behind spot bitcoin even if the underlying bitcoin stack is still intact.

💡 Why the premium matters

If you are buying these bitcoin treasury companies as a means to outperform bitcoin, then you must know what the mNAV is when you make your purchase.

Why? Because you’re betting on the premium holding or expanding.

Let me explain…

The example company from above is valued by the market at $2 billion, while holding $1 billion worth of BTC (mNAV = 2.0). Now imagine bitcoin goes up 50% to $150,000. The company’s bitcoin holdings are now worth $1.5 billion.

If the mNAV stays at 2.0, the market cap rises to $3 billion, and the stock matches bitcoin’s return. But if the mNAV compresses to 1.5, the market cap only rises to $2.25 billion—just a 12.5% gain, despite bitcoin jumping 50%. You underperform badly, not because bitcoin didn’t perform, but because the premium got cut.

The opposite is also true. If the mNAV expands—from 2.0 to 2.5, for example—you get upside on top of upside. That same company would now be valued at $3.75 billion. While bitcoin is up 50%, your stock is up 87.5%. This is what drives the “leveraged bitcoin” narrative during bull runs. You’re riding both the BTC price increase and the multiple expansion.

This is what a lot of investors miss. The leverage they’re getting lives in the premium.

THAT IS THE TRADE.

And if that premium shrinks—even if it stays above 1—you’re leaking value relative to holding a much less risky asset (spot bitcoin).

Note: If the company is generating strong BTC yield—growing bitcoin per share over time—that can soften the impact of multiple compression. In some cases, it can even overcome it. There’s a breakeven point between how much BTC yield the company produces and how much the multiple shrinks. If yield outpaces compression, you can still outperform. But if it doesn’t, you’re just bleeding value—even in a bull market.

🧠 Sats-first thinking

Here’s the message I want to drive home…

A lot of people are buying stocks like Strategy and Metaplanet without paying attention to the most critical detail of the trade. They may have heard about mNAV as a concept—even understand what it is and how it’s calculated—but fail to recognize how it relates to their own position when they buy the stock.

That doesn’t mean these stocks are always a bad bet. Sometimes they outperform—especially when the market is euphoric, the mNAV expands, and the company is stacking aggressively with shareholder-friendly terms. But those outcomes depend on variables most investors aren’t watching: the BTC yield, the dilution, the balance sheet structure, the quality of management, and—most of all—the direction of the premium.

And during that market euphoria, it’s all too easy to get swept up in the madness.

Holding spot bitcoin is the benchmark, and any other potential investment has to beat it to make it worthwhile.

So if you’re going to dabble in bitcoin treasury companies, do it with eyes wide open. Know what you’re buying and the premium you’re paying.

And if you’re unsure about how mNAV will affect your investment, you can always just stay humble and stack sats.

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That’s it for this week. Thanks for reading!

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Until next time,

Trey ✌️