B. Riley Flags Recovery Signs in Digital Asset Treasuries as BitMine Extends Ether Lead
Investment bank B. Riley reported easing selling pressure amid optimism regarding the end of the U.S. government shutdown. Despite declining digital asset market net asset values (mNAVs), buy-rated BitMine Immersion Technologies (BMNR) led accumulation, adding $360 million in ether to its holdings, significantly increasing its ratio of ether per 1,000 shares. Median mNAV fell to 0.9 from 1.0 across 25 tracked digital asset treasuries, while digital asset treasuries underperformed underlying tokens for a third consecutive week. Analysts noted a potential recovery setup as short sellers began covering positions in digital asset companies like Strategy (MSTR). Improving macroeconomic conditions and stablecoin adoption may further support a rebound, they concluded.
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Muted Deployment of Digital Assets Amid Deleveraging
Corporate digital asset deployment remained muted week-over-week as deleveraging continued. However, investment bank B. Riley noted in its report that selling pressure has eased, fueled by optimism that an end to the U.S. government shutdown could improve market sentiment.
BitMine Immersion Technologies Leads Accumulation
Despite compressed market net asset values (mNAVs), BitMine Immersion Technologies (BMNR) led the accumulation, adding roughly $360 million in ether (ETH), according to B. Riley's report on Wednesday. This increased BitMine's ratio to 11.2 ether per 1,000 shares, significantly higher than the 4.0 per 1,000 average of its peers, as noted by analysts Fedor Shabalin and Nick Giles.
Decline in Digital Asset Treasury Valuations
Across the 25 digital asset treasuries tracked by B. Riley, the median mNAV fell to 0.9 from 1.0, reflecting ongoing steep discounts to crypto holdings. Analysts reported that digital asset treasuries have underperformed compared to their underlying tokens for the third consecutive week.
Performance of Key Cryptocurrencies
Companies holding bitcoin (BTC), ether (ETH), and solana (SOL) saw declines of 5.2%, 4.5%, and 0.9%, respectively. However, the analysts suggested that the decelerating pace of declines might signal exhaustion in selling pressure, potentially paving the way for recovery.
Short Sellers and Recovery Potential
Short sellers have begun covering positions in companies like Strategy (MSTR), whose multiple contracted to 1.1 from 2.0 in July, according to B. Riley's analysts. This contraction has been interpreted as a possible setup for recovery in the sector.
Potential Catalysts for a Rebound
The report highlighted potential macro conditions that could drive a rebound, such as a possible government funding deal and growing stablecoin adoption. These factors are expected to serve as catalysts for renewed growth in the digital asset space.