Bitcoin (BTC) Treasury Analysis: Doubts on SPACs

Has the PIPE model failed for bitcoin treasury companies? The collapse in the share prices for two notable recently closed deals — KindlyMD (NAKA) and Strive (ASST) suggests as much.

A PIPE, or Private Investment in Public Equity, is a financing mechanism where institutional investors purchase shares directly from a publicly traded company at a pre-determined price, typically below market value, which allows the company to raise capital at a much faster rate without the lengthy and costly process of a traditional public offering.

PIPE transactions are often used by companies undergoing reverse mergers or going public via special-purpose acquisition company (SPAC), and they have recently become a preferred funding strategy among bitcoin treasury companies looking to rapidly expand their bitcoin holdings.

Despite their best efforts, recent examples suggest that the PIPE model is not just struggling to deliver shareholder value but also incinerating investor capital at a speedy rate.

This feature is part of CoinDesk’s Bitcoin Treasuries Theme Week, sponsored by Genius Group.

A case study for PIPE

The company to embrace a PIPE was healthcare company KindlyMD (NAKA), which completed a reverse merger in May 2025, resulting in bitcoin treasury company Nakomoto becoming a wholly owned subsidiary and well-known bitcoin advocate David Bailey becoming the CEO. Pivotal to this transaction was a PIPE financing deal that raised $563 million in gross proceeds to mostly fund bitcoin purchases.

Additionally, the company issued a $200 million senior secured convertible note to Yorkville Advisors, which was later closed and replaced with another note. This took the total financing for NAKA to $763 million.

The terms of the PIPE were as follows: the initial round raised $510 million at $1.12 per share in May, followed by an additional $51.5 million at $5 per share in June.

These funds were deployed to accumulate bitcoin, with NAKA purchasing 21 BTC for $2.3 million in July and a further 5,743 BTC for $679 million in August.
Despite the rapid accumulation of bitcoin, the company’s market performance hasn’t followed suit.

Since the reverse merger back in May, NAKA’s stock has fallen by more than 95% from highs of $30 to the current $0.80. Its market net asset value (mNAV) has also slipped below 1, indicating that the market now values the company at less than the worth of its underlying bitcoin and assets.

The second company to adopt a PIPE strategy was Strive (ASST), founded by Vivek Ramaswamy, which merged with Asset Entities through a SPAC deal announced in May and completed in September.

Strive raised $750 million in gross proceeds through a PIPE priced at $1.35 per share, representing a 121% premium to ASST’s pre-merger share price.

The proceeds funded the purchase of 5,885 BTC, and the structure was entirely debt-free. In addition to the PIPE, Strive announced a $450 million equity shelf offering and a $500 million share buyback plan intended to counteract dilution.

The company also inked an all-stock deal to acquire another bitcoin treasury company trading at a discount to the value of its stack — Semler Scientific and its 5,048 bitcoin.

If approved, the pending acquisition of Semler Scientific would increase Strive’s bitcoin holdings to 11,700 BTC. Despite these moves, ASST’s stock performance has mirrored that of NAKA, plummeting more than 90% from its all-time high in May, as high as $12, now trading around $1 per share. Similar to NAKA, ASST’s mNAV is just below 1.

Caution is the word going forward

The desultory performance of NAKA and ASST calls into question at least two other bitcoin treasury SPAC/PIPE deals yet to be completed.

One of them is the merger between Twenty One Capital (XXI) — led by Jack Mallers — and Cantor Equity Partners (CEP). The firm announced its PIPE transaction back in April, becoming the third-largest bitcoin treasury firm with holdings of 43,514 BTC. Like the previous PIPE-driven deals, initial post-merger enthusiasm sent CEP’s share price higher from $10 to $60, but shares have now retreated to around $20.

In addition, Bitcoin Standard Treasury Company (BSTR), led by Adam Back, plans to go public through a SPAC merger with another Cantor vehicle (CEPO) and aims to raise a total of $3.5 billion, with up to $1.5 billion via a PIPE, expected to launch in Q4.

CEPO shares peaked at $16 in the initial excitement after the announcement and have since retreated to the $10.50 area.

In a nutshell, what these deals show is that while PIPEs are a way to fast-track financing for bitcoin treasury firms, they are also a potentially risky investments that warrant caution.