Bitcoin Treasury Firms Face Steep Stock Declines After PIPE Fundraises

A growing number of Bitcoin-focused companies are discovering the downside of raising capital through Private Investment in Public Equity (PIPE) programs. While these deals can provide quick access to funds for buying Bitcoin, a new report from market analysis platform CryptoQuant shows they have also led to sharp share price declines across the sector.

PIPE offerings allow publicly traded firms to sell newly issued shares to a select group of institutional or accredited investors, usually at a discount to market prices. 

The approach is popular with Bitcoin treasury companies seeking to buy large amounts of the cryptocurrency ahead of expected price rallies or to announce significant BTC purchases that reshape their business narrative.

PIPEs Offer Fast Capital—at a Cost

According to CryptoQuant, these companies often need “large blocks of capital quickly to front-run expected BTC rallies” or to expand their existing holdings. PIPEs deliver that speed and flexibility. Investors, meanwhile, receive shares they can resell after a registration filing, often profiting from the initial discount.

However, the influx of new shares increases supply, diluting existing shareholders and creating what analysts call a “supply overhang.” As PIPE investors begin selling, downward pressure builds on the company’s stock price.

Share Prices Drop as Much as 97% as Bitcoin 

The CryptoQuant report highlights a striking pattern: the stocks of most Bitcoin treasury firms that used PIPE financing have fallen dramatically toward their PIPE issuance levels, with declines ranging from 42% to as much as 97%.

Kindly MD (NAKA) offers one of the starkest examples. Its shares plunged 97% following a PIPE raise, including a single-day drop of more than 50% when PIPE shares became available for trading. Other companies, including Empery Digital (EMPD) and Sequans Communications (SQNS), are already trading below their PIPE issuance prices.

Even firms whose shares remain above their PIPE levels face significant risk. Strive (ASST) and Cantor Equity Partners (CEP) could still see their stock prices fall by as much as 50% to reach the levels set during their PIPE offerings.

CryptoQuant concludes that only a sustained BTC rally can break the cycle of falling share prices. Until then, the very mechanism designed to help these companies expand their Bitcoin treasuries may continue to erode shareholder value.