Has the PIPE model for bitcoin treasury companies failed? The collapse in share prices of two notable deals recently closed: KindlyMD (NAKA) and Strive (ASST) suggests as much.
A PIPE, or Private Investment in Public Equity, is a financing mechanism in which institutional investors purchase shares directly from a publicly traded company at a predetermined price, usually below market value, allowing the company to raise capital at a much faster pace without the long and expensive process of a traditional public offering.
PIPE transactions are typically used by companies undergoing reverse mergers or going public through a special purpose acquisition company (SPAC), and have recently become a preferred financing strategy among bitcoin treasury companies looking to rapidly expand their bitcoin holdings.
Despite its best efforts, recent examples suggest that the PIPE model is not only struggling to generate value for shareholders but also incinerating investors’ capital at a rapid pace.
This feature is part of CoinDesk Bitcoin Treasury Bond Theme Week, sponsored by Genius Group.
A case study for PIPE
The company that adopted a PIPE was healthcare company KindlyMD (NAKA), which completed a reverse merger in May 2025, resulting in bitcoin treasury company Nakomoto becoming a wholly owned subsidiary and well-known bitcoin advocate David Bailey becoming CEO. Pivotal to this transaction was a PIPE financing deal that raised $563 million in gross proceeds to primarily fund bitcoin purchases.
Additionally, the company issued a $200 million senior secured convertible note to Yorkville Advisors, which was later closed and replaced with another note. This brought NAKA’s total funding to $763 million.
The terms of the PIPE were as follows: The seed round raised $510 million at $1.12 per share in May, followed by an additional $51.5 million at $5 per share in June.
These funds were used to accumulate bitcoins: NAKA bought 21 BTC for $2.3 million in July and another 5,743 BTC for $679 million in August.
Despite the rapid accumulation of bitcoins, the company’s performance in the market has not followed the same path.
Since the reverse merger in May, NAKA shares have fallen more than 95% from highs of $30 to the current $0.80. Its market net asset value (mNAV) has also fallen below 1, indicating that the market now values the company below the value of its bitcoins and underlying assets.
The second company to adopt a PIPE strategy was Strive (ASST), founded by Vivek Ramaswamy, which merged with Asset Entities through a SPAC deal announced in May and completed in September.
Strive raised $750 million in gross proceeds through a PIPE priced at $1.35 per share, representing a 121% premium to ASST’s pre-merger share price.
The proceeds financed the purchase of 5,885 BTC and the structure became completely debt-free. In addition to the PIPE, Strive announced a $450 million stock offering and a $500 million share buyback plan aimed at offsetting dilution.
The company also signed an all-stock deal to acquire another bitcoin treasury company that trades at a discount to the value of its stack: Semler Scientific and its 5,048 bitcoins.
If approved, the pending acquisition of Semler Scientific would increase Strive’s bitcoin holdings to 11,700 BTC. Despite these moves, ASST’s stock performance has mirrored that of NAKA, falling more than 90% from its all-time high in May, to $12, now trading around $1 per share. Like NAKA, ASST’s mNAV is just below 1.
Caution is the word going forward.
The disjointed performance of NAKA and ASST calls into question at least two other bitcoin treasury SPAC/PIPE deals that have yet to be completed.
One of them is the merger between Twenty One Capital (XXI), led by Jack Mallers, and Cantor Equity Partners (CEP). The company announced its PIPE transaction in April, becoming the third largest bitcoin treasury company with holdings of 43,514 BTC. Like previous PIPE-driven deals, the initial post-merger enthusiasm saw CEP’s stock price rise from $10 to $60, but now the stock has fallen back to around $20.
Additionally, Bitcoin Standard Treasury Company (BSTR), led by Adam Back, plans to go public via a SPAC merger with another Cantor vehicle (CEPO) and aims to raise a total of $3.5 billion, with up to $1.5 billion via a PIPE, expected to launch in the fourth quarter.
CEPO shares hit a high of $16 in the initial excitement following the announcement and have since retreated to the $10.50 area.
Simply put, what these deals show is that while PIPEs are a way to accelerate financing for bitcoin treasury companies, they are also potentially risky investments that require caution.
