Mike Novogratz Warns Crypto Treasury Firms on Shareholder Value

Galaxy Digital Inc. CEO Mike Novogratz voiced concerns on Wednesday about the current state of cryptocurrency treasury companies, arguing that simply holding digital assets is no longer enough to create meaningful shareholder value.

Treasury Companies Risk Persistent Discounts to Net Asset Value

In a conversation with SkyBridge Capital founder Anthony Scaramucci, Novogratz said many digital asset treasury companies are likely to continue trading at steep discounts to their net asset value, potentially between 80% and 95%. According to him, this situation will persist unless management teams evolve these entities into fully functioning companies rather than passive asset holders.

Owning Crypto Alone Is No Longer a Viable Strategy

Novogratz emphasized that the responsibility of CEOs and boards is to deliver shareholder value, not merely exposure to an underlying crypto asset. He noted that the earlier model of promoting stocks at a premium and relying on new investors to drive gains for earlier shareholders has largely run its course.

Past Success Stories Are the Exception, Not the Rule

While acknowledging that the strategy worked for figures such as Michael Saylor and Tom Lee, Novogratz stressed that those cases were outliers. He argued that most other crypto treasury companies have failed to replicate that success, underscoring the limits of hype-driven valuation models.

Turning Treasury Firms Into Operating Businesses

When asked what he would do if he were running a cryptocurrency treasury company, Novogratz said he would focus on leveraging the internal expertise of the firm to build something distinct. He explained that these companies need a clear narrative and operational purpose that differentiates them from exchange-traded funds.

Scaramucci and Novogratz Remain Active in the Sector

Both Scaramucci and Novogratz maintain active roles in the digital asset treasury space. Scaramucci serves as a strategic advisor to AVAX One Technology, a company focused on the Avalanche ecosystem, while Galaxy Digital has backed Forward Industries, currently the largest publicly traded treasury focused on Solana.

The Rise and Scrutiny of Crypto Treasury Companies

Crypto treasury firms have grown rapidly, inspired by the success of Strategy Inc., the world’s largest corporate holder of Bitcoin. Despite its prominence, Strategy itself trades significantly below the value of its Bitcoin holdings, highlighting the broader challenges facing the sector.

Growing Numbers, Growing Risks

More than 200 crypto treasury companies now exist, with a combined market capitalization estimated at $150 billion, more than triple compared to a year ago. Analysts warn, however, that many of these firms are exposed to heightened risk, particularly those holding volatile or obscure tokens, and their equities may face sharper pressure during market downturns.