The Bitcoin-focused firm faces a liquidity crunch after discounted private share placements flood the market, despite holding over $650 million in BTC reserves.
Nakamoto Holdings, a U.S.-listed Bitcoin treasury and investment company, has seen its shares collapse by more than 98% from May highs, triggered by a wave of selling linked to its $563 million private investment in public equity (PIPE) transactions.
Once valued as a promising Bitcoin-backed public firm, Nakamoto’s financing strategy backfired after large batches of discounted PIPE shares became eligible for resale in September. The sudden liquidity influx drove its share price from $25 to under $1, erasing billions in market capitalization and undermining investor confidence.
Discounted PIPE Funding Backfires
The company, which merged earlier this year with Utah-based KindlyMD, had aimed to use PIPE financing to accumulate Bitcoin and expand its treasury model. However, the structure led to a rapid dilution of shareholder value as investors rushed to exit once lock-ups expired.
“People that are just looking for a trade are actually very expensive capital for us,” CEO David Bailey said in an interview. “We’re looking for long-term aligned partners, not short-term speculators.”
Bailey, who is also CEO of Bitcoin Magazine and a vocal supporter of pro-Bitcoin policies in Washington, said the firm plans to merge its related ventures — including Bitcoin Magazine, the Bitcoin Conference, and hedge fund 210k Capital — under Nakamoto Holdings to strengthen cash flow and stabilize revenue.
Bitcoin Reserves Remain Intact
Despite the market crash, Nakamoto still holds 5,765 BTC worth approximately $653 million, ranking it as the 19th largest public Bitcoin holder globally. Analysts note that while the company’s stock trades far below its Bitcoin-backed asset value, it remains exposed to market volatility and investor sentiment.
At last close, Nakamoto’s Nasdaq-listed shares (NAKA) were priced at $0.95, according to exchange data — a steep discount to its digital asset holdings.
Industry Faces Similar Headwinds
Other Bitcoin-holding firms are also under pressure. Tokyo-based Metaplanet recently announced a $500 million share repurchase program to boost valuation after its Bitcoin-adjusted net asset value fell below parity. The firm currently holds 30,823 BTC worth $3.5 billion.
“The correction across Bitcoin treasuries shows how sensitive these companies are to both crypto prices and financing structures,” said Ryan Watkins, a digital asset researcher in New York. “While tokenization is creating new liquidity models, equity-based Bitcoin plays remain highly speculative.”
Nakamoto’s collapse underscores the risks of aggressive financing strategies in volatile crypto markets — where even large Bitcoin reserves can’t shield firms from investor flight.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.