
Crypto treasury companies that raised money through private investment in public equity (PIPE) deals are facing steep stock price drops. Analytics firm CryptoQuant warns these companies could see their shares fall by up to 50% as lock-up periods end.
PIPE deals let private investors buy new shares at prices below current market rates. This gives companies quick access to cash but creates problems later. When the lock-up periods expire, these investors often sell their shares to take profits.
The selling pressure pushes stock prices down toward the original PIPE deal prices. CryptoQuant calls this effect “PIPE price gravity.” The firm says this pattern is already happening across multiple companies in the sector.
Kindly MD (NAKA) shows how severe these drops can be. The medical company moved into Bitcoin treasury holdings earlier this year. Its stock jumped from $1.80 to nearly $35 after announcing a PIPE raise in late April and May.
But when PIPE shares unlocked, the stock crashed 97% to $1.16. This price sits almost exactly at its PIPE offering price of $1.12. The collapse happened in just a few months.
Other companies are following similar paths. Strive Inc. (ASST) peaked at $13 in May but has dropped 78% to $2.75. CryptoQuant says its PIPE was priced at $1.35, meaning the stock could fall another 55% when the lock-up ends next month.
Cantor Equity Partners (CEP) conducted a PIPE priced at $10. The company’s shares have already fallen nearly 70% from their highs to below $20. CryptoQuant predicts another 50% drop could happen once PIPE investors start selling.
The problems go beyond PIPE deals. At least seven small-cap firms are now using debt to fund share buyback programs. These companies are trying to support their falling stock prices even though they trade below the value of their crypto holdings.
This trend shows growing investor doubt about the crypto treasury strategy. Companies that bought digital assets to boost their stock performance are finding it’s not working as planned.
ETHZilla, formerly 180 Life Sciences, rebranded after buying ether. Its stock has fallen 76% since August. The company recently got $80 million in debt from Cumberland DRW to finance a $250 million buyback program.
Analysts see this as a sign of trouble. “They’re borrowing money to buy time, not tokens,” said Kaiko analyst Adam Morgan McCarthy. The move suggests companies are struggling rather than succeeding with their crypto strategies.
Empery Digital, once called Volcon, expanded its debt facility to $85 million. This happened despite the company holding $476 million in Bitcoin, which is more than its $378 million market value. The math shows investors value the company less than its crypto holdings.
Other companies like SharpLink Gaming, Ton Strategy, and CEA Industries are using similar tactics. Research from K33 shows one in four public Bitcoin treasuries now trade below their net asset value.
The average NAV multiple has fallen to 2.8 from 3.76 in April. This means investors are paying less for these companies relative to their crypto holdings than they were earlier in the year.
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TLDR PIPE-funded crypto treasury companies face potential 50% stock price crashes as lock-up periods expire…

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