What is NAV? The key financial metric for unlocking stock and crypto stock valuations

Imagine a company in the 2025 Bitcoin bull market, where by increasing its Bitcoin holdings, its net asset value (NAV) per share skyrocketed by 70% within a quarter, leading its stock price to trade at a premium far exceeding that of traditional stock markets.

NAV is the core tool for insight into such value changes. Especially now, as “cryptocurrency treasury reserve strategies” become a new trend in the US stock market, NAV and its derivative mNAV have become key indicators for assessing the intrinsic value and market sentiment of publicly listed companies holding large amounts of cryptocurrencies.

01 Financial Fundamentals

In the finance sector, NAV is a fundamental and crucial concept, standing for Net Asset Value. It is mainly used to evaluate the value of asset pools such as investment funds and trust products.

The core calculation of NAV is straightforward: subtract total liabilities from total assets to obtain the net asset value.

For funds, we usually focus on per-share NAV. Its calculation method is: value all assets held by the fund (such as stocks, bonds, cash, etc.) at current market prices, subtract all liabilities, and then divide the net value by the total number of fund shares issued.

For example, if a fund holds stocks worth 100 million yuan, with liabilities of 5 million yuan, and has 50 million shares outstanding, then its per-share NAV is (100 million - 5 million) ÷ 50 million = 1.9 yuan/share.

Depending on the type of fund, the relationship between NAV and trading price varies significantly:

Understanding these differences helps investors grasp the true asset value underlying the market price of their fund holdings.

02 Stock Market Application

When the concept of NAV extends from funds to the stock market, it gives rise to the “per-share net asset value”, which has become an important tool for measuring the intrinsic value of individual stocks.

Its calculation formula is similar to that of funds: (Company’s total assets - total liabilities) ÷ total number of shares outstanding.

For example, if a company’s total assets are 100 yuan, with no liabilities, and it has issued 100 shares, then its per-share NAV is 1 yuan. Theoretically, this 1 yuan represents the ownership stake of shareholders in the company’s net assets.

However, the capital market is far from a simple theoretical calculation. Stock prices are determined by market supply and demand, and often do not equal, or even deviate significantly from, NAV.

Stock price > NAV: usually indicates a premium. The market is optimistic about the company’s future growth potential and is willing to pay a higher price for expected growth. A typical example is technology companies, whose core value (such as R&D technology, patents, user networks) often cannot be fully reflected in the financial statements’ “assets” section.

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