Recent developments in the bitcoin treasury sector have raised questions about the effectiveness of the widely adopted PIPE (Private Investment in Public Equity) financing approach, particularly when executed through SPAC (Special Purpose Acquisition Company) mergers. Two prominent bitcoin treasury firms, KindlyMD (NAKA) and Strive (ASST), have experienced significant declines in their stock prices following their PIPE-driven public listings, highlighting the challenges of this funding strategy.
The PIPE model allows institutional investors to buy shares directly from a publicly traded company at pre-negotiated prices, often below market value. This mechanism is popular for accelerating capital raising efforts without enduring the complexities of a traditional public offering. Bitcoin treasury firms have increasingly embraced PIPE transactions in conjunction with SPAC deals to quickly build up bitcoin holdings.
KindlyMD, which completed a reverse merger in May 2025 to become Nakomoto, leveraged a PIPE financing package that amassed $563 million in gross proceeds primarily to buy bitcoin. The transaction included an initial $510 million round priced at $1.12 per share and an additional $51.5 million at $5 per share. Supplementing this was a $200 million senior secured convertible note from Yorkville Advisors, later replaced by a follow-up note, bringing total funding to $763 million.
Nakomoto aggressively expanded its bitcoin reserves, acquiring 21 BTC for $2.3 million in July and subsequently adding 5,743 BTC for $679 million in August. Despite this expansion, NAKA’s stock has nosedived over 95%, slipping from $30 post-merger to approximately $0.80. The market net asset value (mNAV), which compares market capitalization to the underlying bitcoin holdings and assets, has dropped below 1, signaling that investors are valuing the company at less than its actual asset base.
Similarly, Strive, launched by entrepreneur Vivek Ramaswamy and merged with Asset Entities through a SPAC completed in September, secured $750 million via PIPE financing priced at $1.35 per share—a 121% premium over the pre-merger price. This influx funded the purchase of 5,885 BTC, and unlike NAKA, Strive’s structure is entirely free of debt. Strive also announced a $450 million equity shelf offering and a $500 million share buyback to address potential dilution concerns.
Strive’s strategic moves included an all-stock acquisition deal with Semler Scientific, another bitcoin treasury company holding 5,048 BTC and trading below the value of its bitcoin reserves. The acquisition, pending approval, would nearly double Strive’s bitcoin assets to around 11,700 BTC. Despite these large-scale transactions, ASST has mirrored NAKA’s market trajectory, falling more than 90% from peaks near $12 to just above $1 per share. ASST’s mNAV is also under 1.
The underperformance of NAKA and ASST has prompted skepticism about the viability of other SPAC and PIPE-driven bitcoin treasury deals currently underway. One such pending deal is the merger involving Twenty One Capital (XXI), led by Jack Mallers, with Cantor Equity Partners (CEP). Their PIPE round, announced in April, would elevate the firm’s bitcoin holdings to 43,514 BTC, positioning it among the largest publicly listed bitcoin treasuries.
These developments serve as a cautionary note for investors and companies relying on PIPE financing and SPAC mergers to scale bitcoin holdings quickly. While the strategy offers accelerated capital access, the steep share price declines and undervaluation relative to bitcoin assets demonstrate the challenges of translating bitcoin accumulation into sustained market value.
