Crypto Treasury Companies Face Potential Share Declines Amid PIPE Deals

According to Cointelegraph, crypto treasury companies that have raised capital through private investment in public equity (PIPE) deals are experiencing significant challenges, with their share prices potentially falling by up to 50%. Analytics platform CryptoQuant highlighted that these companies have faced major drawdowns, with share prices often aligning with their PIPE issuance levels. As shares trade above PIPE offering prices, investors nearing the end of their lock-up periods may be inclined to sell, further impacting share values. PIPE deals, which allow private investors to purchase new shares below market price, have been a popular method for crypto treasury companies to quickly raise funds in a competitive sector. However, CryptoQuant noted that while these deals provide quick access to cash, they can negatively affect a company's stock performance. The increase in shares in circulation dilutes existing shareholders, and when PIPE investors sell, it creates an 'overhang' that pressures the stock price. CryptoQuant's analysis of Bitcoin (BTC) treasury companies that conducted PIPE deals revealed significant stock drawdowns, with share prices often gravitating toward their PIPE issuance levels. The report cited the example of Kindly MD (NAKA), a medical firm turned BTC treasury, whose shares fell by over half in a single day once its PIPE shares unlocked. CryptoQuant observed that other crypto treasury companies backed by PIPE deals appear to be following a similar trajectory, with share prices declining post-PIPE deals. For instance, shares in Strive Inc. (ASST) closed at $2.75, down 78% from its 2025 peak of $13. Strive's PIPE was priced at $1.35, suggesting a potential 55% price drop from current levels as PIPE investors will soon be allowed to sell their shares, exerting further downward pressure. Similarly, Cantor Equity Partners (CEP), a blank-check company merging with treasury firm Twenty One Capital, priced its PIPE at $10, and its shares have fallen nearly 70% from their high to under $20, indicating a potential 50% price drop from current levels. Other analysts have warned that even well-established crypto treasury companies are under pressure as the value of their crypto holdings approaches the company's value, potentially triggering a wave of selling. CryptoQuant emphasized that a sustained rally in Bitcoin is the only likely catalyst to prevent further declines in these stocks. Without such a rally, many stocks are poised to continue trending toward or below their PIPE prices.