Crypto treasury companies that have raised funds through private investment in public equity (PIPE) deals could see their shares drop by as much as 50%, according to analytics platform CryptoQuant.
In a market report published Thursday, CryptoQuant noted that firms using PIPE financing “have suffered major drawdowns, with share prices often gravitating toward their PIPE issuance levels.” The report added that some stocks “may face further declines of up to 50%” as trading above PIPE offering prices creates selling pressure from investors reaching the end of their lock-up periods.
PIPE deals, which allow private investors to purchase new shares at a discount to the market price, have been popular among crypto treasury companies looking to quickly raise capital in a crowded sector.
PIPE-flushed firms face significant downside risk
While PIPEs provide companies with rapid and flexible access to cash, CryptoQuant warned they “can create negative effects for a company’s stock performance” as investors aim to lock in gains.
“The PIPE increases the number of shares in circulation, diluting existing shareholders,” the report said. “When PIPE investors are able to sell, the resale of these new shares creates an ‘overhang’ that pressures the stock price.”
Analyzing several Bitcoin treasury companies that conducted PIPE deals, CryptoQuant found that many “have experienced significant stock drawdowns, with share prices often gravitating toward their PIPE issuance levels.”
The platform highlighted that “actual or anticipated selling from PIPE investors” is driving these declines. For example, shares of the medical firm-turned-Bitcoin treasury Kindly MD (NAKA) fell by more than half in a single day once its PIPE shares became tradable.
CryptoQuant reported that Kindly MD’s shares surged from around $1.80 in late April to an intraday high of nearly $35 in late May following its PIPE announcement. However, the stock has since plummeted 97% to $1.16, “essentially touching its $1.12 PIPE price.”
Other crypto treasuries could follow
The analytics platform noted that other PIPE-backed crypto treasury companies appear to be experiencing similar declines.
Shares of Strive Inc. (ASST) closed Thursday at $2.75, down 78% from its 2025 peak of $13 in late May. Strive’s PIPE was priced at $1.35, “which would imply a 55% drop from current levels” once PIPE investors are allowed to sell next month, potentially putting further downward pressure on the stock.
Cantor Equity Partners (CEP), a blank-check company merging with treasury firm Twenty One Capital, priced its PIPE at $10. Its shares have fallen nearly 70% from recent highs to under $20, “implying a potential 50% decline from current levels.”
Analysts have also warned that even well-established crypto treasury companies are under pressure as the market value of their crypto holdings approaches the company’s overall valuation, potentially triggering additional selling.
CryptoQuant emphasized that a “sustained rally in Bitcoin is the only likely catalyst to prevent further declines in these stocks. Without it, many are poised to continue trending toward — or below — their PIPE prices.”
