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

Bitcoin (BTC) treasury companies that raised capital by PIPE (non-public funding in public fairness) offers face mounting stress as share costs gravitate towards their discounted issuance ranges, creating potential losses of as much as 55% for present buyers.

According to a Sept. 25 repnort by CryptoQuant, the sample seems constant throughout a number of companies that used PIPEs to fund Bitcoin purchases.

Kindly MD skilled probably the most dramatic instance, surging 18.5 occasions from $1.88 to an intraday high of $34.77 following its May PIPE announcement at $1.12 per share.

However, the stock collapsed 97% to $1.16, basically matching its PIPE price, with greater than half the decline occurring in a single day after PIPE shares unlocked for buying and selling.

Other Bitcoin treasury shares present related trajectories. Strive (ASST) trades at $3.00, down 78% from its 2025 high, whereas its PIPE price sits at $1.35. This hole suggests a possible 55% decline if shares revert to the issuance degree.

The stress might intensify subsequent month when ASST’s PIPE buyers turn out to be eligible to promote their holdings.

Cantor Equity Partners faces comparable risk, buying and selling at $19.74 in comparison with its $10.00 widespread fairness PIPE price. The 50% potential decline displays the substantial low cost constructed into these non-public placements.

Some companies already commerce under their PIPE ranges. Empery Digital trades at $7.94, representing a 21% low cost to its $10.00 PIPE price. The stock peaked at $11.37 on Aug. 13 earlier than falling as little as $6.50, marking a 42% drawdown.

The firm’s market capitalization has dropped under the worth of its Bitcoin holdings.

Bitcoin treasury companies depend on PIPEs as a result of they should rapidly entry giant capital blocks to execute their methods, typically missing entry to conventional financing or enough working income.

These offers supply velocity and adaptability, however they create vital dilution and potential promoting stress as soon as the resale restrictions are lifted.

The report famous that the PIPE construction has a number of drawbacks for current shareholders. Beyond speedy dilution, the discounted pricing creates an “overhang” impact, permitting buyers to promote publicly.

PIPE buyers usually obtain registration rights, which permit them to liquidate their positions after submitting resale statements.

Additionally, the report recognized 5 Bitcoin treasury companies that collectively raised over $2.5 billion by PIPE transactions, with Bitcoin holdings starting from 3,205 to 43,514 BTC.

The knowledge prompt solely a sustained Bitcoin rally may stop further declines in these shares.

Without renewed momentum within the crypto market, many companies seem positioned to proceed trending towards or under their PIPE costs, as institutional buyers who bought at vital reductions search to understand earnings in public markets.

This dynamic creates a suggestions loop the place weakening Bitcoin costs stress treasury firm shares, probably forcing further promoting that further weighs on each Bitcoin and the companies themselves.

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