PIPE dreams: Bitcoin treasury companies risk further 55% stock price declines

Bitcoin (BTC) treasury companies that raised superior done PIPE (private concern successful nationalist equity) deals look mounting unit arsenic stock prices gravitate toward their discounted issuance levels, creating imaginable losses of up to 55% for existent investors.

According to a Sept. 25 repnort by CryptoQuant, the signifier appears accordant crossed aggregate companies that utilized PIPEs to money Bitcoin purchases.

Kindly MD experienced the astir melodramatic example, surging 18.5 times from $1.88 to an intraday precocious of $34.77 pursuing its May PIPE announcement astatine $1.12 per share.

However, the banal collapsed 97% to $1.16, fundamentally matching its PIPE price, with much than fractional the diminution occurring successful a azygous day aft PIPE shares unlocked for trading.

Other Bitcoin treasury stocks amusement akin trajectories. Strive (ASST) trades astatine $3.00, down 78% from its 2025 high, portion its PIPE terms sits astatine $1.35. This spread suggests a imaginable 55% diminution if shares revert to the issuance level.

The unit whitethorn intensify adjacent period erstwhile ASST’s PIPE investors go eligible to merchantability their holdings.

Cantor Equity Partners faces comparable risk, trading astatine $19.74 compared to its $10.00 communal equity PIPE price. The 50% imaginable diminution reflects the important discount built into these backstage placements.

Some companies already commercialized beneath their PIPE levels. Empery Digital trades astatine $7.94, representing a 21% discount to its $10.00 PIPE price. The banal peaked astatine $11.37 connected Aug. 13 earlier falling arsenic debased arsenic $6.50, marking a 42% drawdown.

The company’s marketplace capitalization has dropped beneath the worth of its Bitcoin holdings.

Bitcoin treasury companies trust connected PIPEs due to the fact that they request to rapidly entree ample superior blocks to execute their strategies, often lacking entree to accepted financing oregon capable operating revenue.

These deals connection velocity and flexibility, but they make important dilution and imaginable selling unit erstwhile the resale restrictions are lifted.

The study noted that the PIPE operation has respective drawbacks for existing shareholders. Beyond contiguous dilution, the discounted pricing creates an “overhang” effect, allowing investors to merchantability publicly.

PIPE investors typically person registration rights, which let them to liquidate their positions aft filing resale statements.

Additionally, the study identified 5 Bitcoin treasury companies that collectively raised implicit $2.5 cardinal done PIPE transactions, with Bitcoin holdings ranging from 3,205 to 43,514 BTC.

The information suggested lone a sustained Bitcoin rally could forestall further declines successful these stocks.

Without renewed momentum successful the crypto market, galore companies look positioned to proceed trending toward oregon beneath their PIPE prices, arsenic organization investors who purchased astatine important discounts question to recognize profits successful nationalist markets.

This dynamic creates a feedback loop wherever weakening Bitcoin prices unit treasury institution stocks, perchance forcing further selling that further weighs connected some Bitcoin and the companies themselves.

The station PIPE dreams: Bitcoin treasury companies hazard further 55% banal terms declines appeared archetypal connected CryptoSlate.