The Rise and (Mostly) Fall of the PIPE Model in Bitcoin Treasury Strategies

Core Insights - The PIPE model appears to be failing for bitcoin treasury companies, as evidenced by the significant decline in share prices of KindlyMD (NAKA) and Strive (ASST) following their PIPE transactions [1][3]. PIPE Financing Overview - A PIPE (Private Investment in Public Equity) is a financing mechanism allowing institutional investors to purchase shares directly from a publicly traded company at a predetermined price, typically below market value, facilitating quicker capital raising compared to traditional public offerings [2]. - PIPE transactions are commonly utilized by companies undergoing reverse mergers or SPACs and have gained popularity among bitcoin treasury companies aiming to expand their bitcoin holdings rapidly [3]. Case Study: KindlyMD (NAKA) - KindlyMD (NAKA) completed a reverse merger in May 2025, with Nakomoto becoming a wholly owned subsidiary and David Bailey as CEO, raising $563 million through a PIPE financing deal primarily for bitcoin purchases [5]. - The total financing for NAKA reached $763 million, including a $200 million senior secured convertible note [6]. - NAKA acquired 21 BTC for $2.3 million in July and 5,743 BTC for $679 million in August, but its stock price plummeted over 95% from $30 to $0.80 since the reverse merger, with its market net asset value (mNAV) falling below 1 [7][8]. Case Study: Strive (ASST) - Strive (ASST), founded by Vivek Ramaswamy, adopted a PIPE strategy through a SPAC merger with Asset Entities, announced in May and completed in September [8].