Analysts Warn Crypto Treasury Companies Could Fall Back to Issue Levels
Analysts at CryptoQuant warn that the very mechanism used to raise billions is now setting the stage for sharp declines in share prices.
Why PIPEs Backfire
Private investment in public equity deals were designed to give companies fast access to capital. For crypto treasuries chasing growth, they offered a lifeline: new shares issued at a discount, cash in the bank, and flexibility in crowded markets.
But the trade-off is dilution. Once lock-up periods end, investors who bought in cheap can unload, flooding the market with supply and dragging share prices back toward issuance levels.
Case Studies of Collapse
That pattern has already played out dramatically. Kindly MD, a medical outfit that pivoted into Bitcoin holdings, watched its stock rocket from under $2 to nearly $35 on PIPE excitement earlier this year. The rally didn’t last: as PIPE shares unlocked, the stock cratered 97% to nearly its $1.12 issue price.
Strive Inc. has charted a similar course, falling almost 80% from its May peak. With its PIPE priced at $1.35 and shares still more than double that level, CryptoQuant sees another wave of selling risk once investor restrictions lift.
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Even Cantor Equity Partners, in the middle of merging with Twenty One Capital, shows the same dynamic. Its PIPE was priced at $10, yet its stock hovers below $20 after a 70% retreat from highs – leaving room for another major drawdown if PIPE participants decide to cash out.
The Bigger Picture
The warning is clear: until Bitcoin delivers a sustained rally that boosts sentiment across the sector, PIPE-backed treasury firms will remain vulnerable to relentless selling pressure. For investors, the lesson is that fast fundraising tools come with hidden costs – and in crypto, those costs can quickly wipe out eye-catching gains.
The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
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