Crypto treasuries risk 50% downside on PIPE selling pressure

Crypto treasury companies that have raised capital in private investment in public equity (PIPE) deals could see their shares fall by half with selling pressure, according to analytics platform CryptoQuant.

Crypto treasury companies that have raised capital through PIPE deals “have suffered major drawdowns, with share prices often gravitating toward their PIPE issuance levels,” CryptoQuant said in a market report on Thursday.

It added that shares in some companies “may face further declines of up to 50%” as shares trade above PIPE offering prices, and investors nearing the end of their lock-up periods are likely looking to sell.

PIPE deals allow private investors to buy new shares below market price, and have been popular among crypto treasury companies to quickly raise cash amid a crowded sector.

PIPE-flushed firms face downside risk

CryptoQuant noted that PIPE deals allow companies to quickly and flexibly access cash, but said such deals “can create negative effects for a company’s stock performance” as investors aim to lock in profits.

“The PIPE increases the amount of shares in circulation, diluting existing shareholders,” it said. “When PIPE investors are able to sell, the resale of these new shares creates an ‘overhang’ that pressures the stock price.”

CryptoQuant analyzed the stocks of some Bitcoin (BTC $109,573) treasury companies that conducted PIPE deals, finding that many “have experienced significant stock drawdowns, with share prices often gravitating toward their PIPE issuance levels.”

It pinned “actual or anticipated selling from PIPE investors” as the reason for the drawdowns, noting shares in the medical firm turned BTC treasury Kindly MD (NAKA) fell by over half in a single day once its PIPE shares unlocked.

Chart showing Kindly MD’s share price overlaid with key events related to its PIPE deal. Source: CryptoQuant

CryptoQuant said Kindly MD shares rose from around $1.80 in late April to an intraday high of nearly $35 in late May on its PIPE announcement. However, it’s since dropped by 97% to a low of $1.16, “basically touching its $1.12 PIPE price.”

Other crypto treasuries could head down

CryptoQuant noted that other PIPE-backed crypto treasury companies “seem to be going in the same direction,” seeing their share prices fall after PIPE deals.

Shares in Strive Inc. (ASST) closed trading on Thursday at $2.75, down 78% from its 2025 peak of $13 in late May.

CryptoQuant said Strive’s PIPE was priced at $1.35, “which would imply a 55% price drop from current levels” as its PIPE investors “will be allowed to sell their shares next month, putting further downward pressure to the stock.”

It added that Cantor Equity Partners (CEP), a blank-check company merging with the treasury firm Twenty One Capital, priced its PIPE at $10. It’s also fallen nearly 70% from its high to under $20, “implying a potential 50% price drop from its current level.”

Other analysts have warned that even the well-established crypto treasury companies are facing pressure as the value of their crypto holdings creeps toward the company’s value, which could spark a wave of selling.

CryptoQuant said that a “sustained rally in Bitcoin is the only likely catalyst that could prevent further declines in these stocks. Without it, many are poised to continue trending toward — or below — their PIPE prices.”