Fees will bleed crypto treasury companies for decades
Now the May 2025 crypto treasury stock bubble has well and truly burst, analysts are reviewing the fine print that many investors ignored when they bid up stocks as high as 23x multiple-to-Net Asset Value (mNAV).
Digging through Security and Exchange Commission filings, they’ve unearthed millions of dollars in eye-popping fees.
Investors primarily value crypto treasury sector stocks, unlike traditional companies, based on the value of a company’s crypto holdings multiplied by mNAV.
This mNAV multiplier fluctuates alongside investors’ confidence, fear, and greed. Ultimately, crypto treasury companies trade based on executives’ ability to instill confidence that they will sustainably accrete crypto holdings to shareholders on a dilution-adjusted basis.
For up to 20 years into the future, however, publicly-listed crypto treasury companies will be quietly paying advisors and asset managers lavish pay packages.
With annual service fees of up to 2% plus options, warrants, and other equity-based compensation that can exceed 5% of the company based on certain milestones, these fees are an extraordinary hurdle to long-term performance.
For example, the largest publicly-traded Solana treasury company owes a 1.75% annual fee on its holdings for 20 years. This fee-burdened company, Upexi, traded at a 10.4x mNAV as recently as April 21.
Today, its market cap has declined to less than 1x its $381 million SOL holdings.
Read more: MicroStrategy wannabes and the return of mNAV mania
Upexi, of course, contests any insinuation of a suboptimal mNAV and has therefore invented its own mNAV variant, “fully-loaded mNAV.”
Its leadership wrote a two-paragraph definition to boosts its basic mNAV of 0.94x to a much better, redefined, fully-loaded mNAV of 1.8x.
Even that redefined multiplier is still, unfortunately, at least 80% below its April 21 high.
The ‘most interesting’ crypto treasury fees
Consider another example from BitMEX Research’s compilation of treasury companies’ “most interesting” advisory and asset management agreements.
Bitcoin (BTC) treasury companies, including Anthony Pompliano’s Nasdaq-listed BRR, made that list. His newly public company announced a $750 million deal that will cost shareholders approximately 5% of outstanding share capital plus 15% of BTC’s USD gains going forward.
Pompliano-founded Inflection Points Inc. will siphon away those proceeds, according to BitMEX Research.
Other crypto treasury companies have eye-popping fees that will slowly drain cash from firms that pitched investors on long-term value.
Billions of dollars worth of digital assets are on the balance sheets of public companies who have disclosed double- and triple-digit basis point annual fees to advisors and asset managers that will persist for years.
In April and May, massive crypto acquisitions lured investors into paying steep premiums for these public companies. Going forward, persistent and heavy fee structures will drag on shareholder returns.
The fine print that very few investors read will siphon value for decades to come.
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