Has the PIPE model failed for Bitcoin treasury companies? The collapse in the stock prices of two notable recent trades, KindlyMD (NAKA) and Strive (ASST), suggests as much.
PIPE (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 price). This allows companies to raise capital more quickly without the lengthy and costly process of a traditional public offering.
PIPE transactions are commonly used by companies undertaking reverse mergers or going public via special acquisition purpose companies (SPACs), and have recently become a preferred fundraising strategy among Bitcoin treasury firms looking to rapidly expand their Bitcoin holdings.
Despite best efforts, recent examples suggest that the PIPE model is not only struggling to deliver shareholder value, but also rapidly burning through investors' capital.
This feature is part of CoinDesk Bitcoin Government Bond Theme Week hosted by Genius Group.
PIPE case study
PIPE was adopted by healthcare company KindlyMD (NAKA), which completed a reverse merger in May 2025 that resulted in Bitcoin finance company Nakomoto becoming a wholly owned subsidiary and prominent Bitcoin advocate David Bailey taking over as CEO. A pivotal part of the deal was the PIPE financing transaction, which raised a total of $563 million, primarily to fund the purchase of Bitcoin.
In addition, the company issued $200 million in senior secured convertible notes to Yorkville Advisors, which were later closed and replaced with other notes. This brings total funding for NAKA to $763 million.
The conditions for PIPE were as follows: The first round raised $510 million in May at $1.12 per share, followed by another $51.5 million in June at $5 per share.
These funds were deployed to accumulate Bitcoin, with NAKA purchasing 21 BTC for $2.3 million in July and an additional 5,743 BTC for $679 million in August.
Despite Bitcoin's rapid accumulation, the company's market performance has not followed suit.
Since the reverse merger in May, NAKA stock has fallen more than 95% from its high of $30 to its current $0.80. The company's market net asset value (mNAV) is also below 1, indicating that the market values the company lower than the value of the underlying Bitcoin and assets.
The second company to adopt the PIPE strategy was Strive (ASST), founded by Vivek Ramaswamy, which merged with Asset Entities through a SPAC transaction announced in May and completed in September.
Strive raised total proceeds of $750 million through a PIPE at $1.35 per share. This represents 121% of ASST's pre-merger share price.
The proceeds funded the purchase of 5,885 BTC, and the structure was completely debt-free. In addition to the PIPE, Strive announced a $450 million stock issuance and a $500 million share repurchase plan aimed at combating dilution.
The company also entered into an all-stock deal to acquire Semler Scientific, another Bitcoin treasury firm that trades at a discount to Stack's value, 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 mirrors NAKA's stock price, which has plunged more than 90% from its May high of $12 and now trades around $1 per share. Similar to NAKA, ASST's mNAV is slightly below 1.
I need to be careful in the future
The dismal performance of NAKA and ASST calls into question at least two Bitcoin Treasury SPAC/PIPE deals that have yet to be completed.
One is the merger of Jack Mallards' Twenty One Capital (XXI) with Cantor Equity Partners (CEP). The company announced the PIPE transaction in April, making it the third largest Bitcoin treasury company with 43,514 BTC. As with previous PIPE-led deals, the initial post-merger frenzy saw CEP stock rise from $10 to $60, but it has now fallen to around $20.
Additionally, Bitcoin Standard Treasury Company (BSTR), led by Adam Back, plans to go public through a SPAC merger with another Cantor Vehicle (CEPO), aiming to raise a total of $3.5 billion, including up to $1.5 billion via PIPE, which is expected to begin in the fourth quarter.
CEPO stock peaked at $16 on initial excitement after the announcement, but has since retreated to around $10.50.
In short, these transactions show that while PIPE is a way for Bitcoin treasury companies to raise capital quickly, it is also a potentially risky investment that requires caution.
