CryptoQuant Warns: PIPEs Are Suboptimal Strategy for Bitcoin Treasury Corporations

Private investment in public equity might not be the golden ticket for companies stacking bitcoin on their balance sheets.

Funding Flaws Exposed

CryptoQuant's latest analysis delivers a stark warning to corporate treasuries diving into bitcoin acquisition through PIPE deals. These traditional financing mechanisms—beloved by Wall Street suits—create unnecessary complications for digital asset allocation.

Structural Misalignment

The report highlights how PIPE structures introduce regulatory overhead and liquidity constraints that undermine bitcoin's core value proposition. Companies seeking treasury exposure face better alternatives that don't involve dancing to Wall Street's tune.

Corporate treasury teams chasing bitcoin returns should probably look beyond the same old financial engineering tricks that haven't worked for traditional assets in the first place.

PIPE Dumping Echoes Across Bitcoin Treasury Sector

The clearest example of this pattern is Nakamoto Corporation (NAKA). After raising funds via PIPE at $1.12 per share, NAKA’s stock skyrocketed to $34.77 in late May, buoyed by a rising Bitcoin market and investor enthusiasm for treasury-heavy crypto firms. But once PIPE shares unlocked, the stock crashed over 50% in one day, reaching $1.16 on September 15, a 96% collapse from its peak.

In a recently published report CryptoQuant warns that other PIPE-funded firms may follow a similar path. Strive (ASST), currently trading at $3, still sits above its PIPE price of $1.35, leaving a possible 55% downside when its own PIPE unlocks next month. CEP is also flagged for risk, trading nearly 2x above its PIPE level.

Meanwhile, Empery Digital (EMPD) is already below its PIPE price, and Sequans Communications (SQNS) is hovering just above it. According to the report, unless bitcoin posts a sustained rally, many of these stocks are likely to trend toward, or below, their PIPE issuance levels.

As these mechanisms become more common in the crypto market, the NAKA episode may serve as a cautionary tale for retail investors seduced by high valuations without understanding the mechanics behind early-stage liquidity events.

Also read:FG Nexus Hits 50,000 ETH Treasury Milestone, Shares Rise