These 4 Crypto Treasury Companies Are Primed for a Price Crash

Many of you may have seen the news about Sharplink and Upexi crashing after investors tried to sell private placements from earlier this spring. I wanted to know if these two events were isolated incidents, or if more pain could be coming. It turns out to be the latter.

These 4 Crypto Treasury Companies Are Primed for a Price Crash

One popular method of raising money for crypto treasury companies has already caused major drops for two firms. Another four could be on the way.

With a market capitalization below $30 million in June, BitMine Immersion Technologies (BMNR), a bitcoin mining company based in Las Vegas, Nev., was a middling enterprise in a highly competitive industry. But that all changed on June 25, when the company announced its switch to a crypto treasury strategy focused on Ethereum. As part of the transformation, it raised $250 million through a private investment in public equity (PIPE) vehicle and named crypto permabull Tom Lee as chairman of its board of directors.

The stock immediately shot up over 1,300%. Today, with a market capitalization of $4.6 billion, the stock is trading at a premium of 17.23x its book value.

But this success story comes with significant fine print. Because Bitmine chose to raise these funds via a PIPE, a tidal wave of sell pressure is coming in the near future. If history is any guide, the stock is primed for a drop of at least 60%. This could occur when the shares sold in the $250 million raise to wealthy institutional customers become available for sale to the general public, which is likely to happen sometime this summer.

How big of a supply glut are we talking about? Before the raise, Bitmine had a circulating supply of only 4.3 million shares. To raise the $250 million it had to sell an additional 55.56 million shares. That is tantamount to a 12.92x increase in share count. 

And Bitmine is not alone in this challenge.

Asset Entities (ASST), a social media marketing company based in Dallas, Texas, is facing a similar challenge. It had a market capitalization under $10 million in early May and a supply base of just 15.77 million shares. That also changed on May 27, when the company raised $750 million via a PIPE and merged with former presidential candidate Vivek Ramaswamy’s Strive Asset Management. Its stock also jumped over 1,300%.

But much like Bitmine, a tsunami of sell pressure is also coming for this company. The PIPE increased Asset Entity’s circulating supply from 15.77 million shares to 361.81 million — a 21.94x increase. 

A similar challenge awaits Justin Sun’s SRM Entertainment, whose stock surged 902.5% after a deal was struck to convert the souvenir designer into a Tron treasury company. As part of the deal that raised $100 million in a PIPE, the 17.24-million share base expanded by 11.6x  to accommodate the 200 million in newly issued shares.

And finally, consider Bitcoin Magazine’s David Bailey, who raised $563 million in a PIPE to merge Nakamoto Holdings with KindlyMD (NAKA) as part of a $763 million investment round that also included debt financing. When the announcement was made on May 12, 2025, the company increased its share size by 18.7x from 6.02 million to 112.6 million. The stock surged by over 1,200% when the announcement came out but has since given up half of the gains, perhaps because the deal is not consummated yet and the company is yet to begin accumulating bitcoin in earnest. Still, it is up 586.2% since the announcement.

These companies are clear examples of the risks that come with crypto’s newest trend, treasury companies that are leveraged hedge funds trading on public markets. If investors are not careful, they could get caught offering exit liquidity for institutions that get into these details at a fair price before the massive run-ups. 

In fact, one investor in multiple such deals, who spoke to Unchained on the condition of anonymity, said, “It's a tricky game, and most retail should not be participating in these things. It’s a game for institutions and hedge funds.”

PIPE Dreams

Not every such deal raises the same red flags as those found in BitMine, Asset Entities, Nakamoto, and SRM. A few factors have to come together in just the right way. For example, the company involved in the deal usually must be akin to a penny stock with a low float (the number of shares available for sale on a public market) and overall supply. All four aforementioned companies fit the bill. 

Then the PIPE deal needs to come in and blow up both figures. As demonstrated in the chart below, not every fundraise meets the criteria. For example, Trump Media Group (DJT) raised $1.5 billion via a PIPE on May 27 (as part of a $2.5 billion deal that included $1 billion inconvertible debt), but its stock hardly noticed. In fact, it went down. For a point of comparison to the previous three companies, this new issuance of 55.86 million shares was only a 25.32% increase from its 220.62 million existing base. 

The match that lights the dynamite comes when these shares become eligible for sale. Unlike a share sold through a typical IPO, equities sold via a PIPE are not immediately liquid because they are not registered with the Securities and Exchange Commission (SEC). This step occurs when the company files a registration form with the regulator, usually an S-1 or S-3, which discloses all of the information required by investors to make informed decisions about a purchase, such as the outlook for the company, use of proceeds, risk factors, etc. 

For PIPE companies, particularly those based in the U.S. (foreign firms have slightly different requirements and forms), the typical route is filing an S-3 since these are already publicly listed companies and it is a less-intensive form to fill out. 

In most cases, companies raising money via a PIPE promise investors to file their registration statement as quickly as possible. After all, what investor wants to have their assets locked up? Take for example this company presentation from Nakamoto/KindlyMD. In the slide below, the company promises potential investors to file its S-3 in an expedient manner and also points out that there is no lockup for PIPE investors. The company cannot file its registration statement until the merger closes, which is expected to happen this quarter.

Unfortunate PIPE History

The two big cautionary tales that investors need to know are Upexi (UPXI), a Solana treasury company, and Sharplink (SBET), a firm focused on Ethereum. Both raised massive sums via PIPEs, and their respective shares precipitously fell after they became tradeable. 

For Sharplink, the company raised $425 million and added 58.7 million shares to its existing count of 659,680, a jump of 8,893%. The stock cratered on June 12 when the company filed a form called an S-ASR. This is a type of S-3 registration form with a twist — those shares became immediately available for sale because the company is a well-known seasoned issuer (WKSI), which basically allows companies to make private investment sales like PIPEs available for sale right away. The following chart shows that trading volume in SBET surged by over 800% right after the form was filed.

A similar story happened with Upexi, a hitherto real estate tech company that repositioned itself as a Solana treasury firm in the spring. The firm raised $100 million in a PIPE and subsequently increased its share count of 1.34 million outstanding units by another 35.97 million, which is a 25.69x increase. The company’s S-1 became effective on June 23, which is clearly indicated in the stock drop from the above chart.

Sharplink executives did not respond to interview requests about the stock drop, but Upexi did make its new chief strategy officer, Brian Rudick, available for a conversation. When asked if he expected such a drop following the notice of effectiveness, he responded that it was always a possibility. “For us, when we went out to raise a PIPE, it was unclear whether or not everybody would have diamond hands and hold or even if the market would just have fear about potential selling [from the 15 cryptocurrency VCs that made up almost all of the PIPE],” said Rudick. “We knew that [selling] was always a possibility. But to get to market as quickly as we did, the potential for there to be selling I think for us was a tradeoff that we obviously wanted to make.”

In fact, this selling is probably necessary in order to inject enough liquidity into the market for actual price discovery of the shares.

What Treasury Companies and Investors Can Do

Given the examples set by Sharplink and Upexi, it seems inevitable that Bitmine, Asset Entities, and SRM will need to go through a similar transition period. And it does not appear that they can do much to stop it. 

One lawyer familiar with these types of deals, who spoke to Unchained on the condition of anonymity, said, “You could [get an agreement for people not to sell]. I think the reason you would do that is to protect against this kind of optics. Some people might just say, ‘We don't want to sell anyway and agree to be locked up for a period of time,’ and maybe optically, that gives people comfort. When you have a large group like this, it can be hard to manage. As a practical matter, is anybody going to do that? I doubt it, but you could, if it gave the market comfort.”

So perhaps the next best hope is that investors hold onto these shares to avoid paying income taxes in favor of more favorable capital gains tax. One investor in both Upexi and Sharplink, who spoke to Unchained also on the condition of anonymity and claims not to have sold the firm’s stakes in either company, laid out their thinking like this: "It's inefficient from a tax perspective to keep going in and out. You're just going to eat short-term capital gains, so you're going to eat a 40% tax. If you're directionally long and you think that the premium to NAV is going to persist roughly at what it is, you might just save yourself 20%.”

But, again, that theory has two problems. First, investors could panic sell if they think that others might start liquidating their holdings. Put another way, they might not want to be the first out the door but don’t have a problem with being second. Second, if a company builds up a large position based on a very small prior stock float, it does not require everyone to sell in order to crash the price.

Maybe the best plan is just diversifying sources of funding when companies launch these treasuries. Each comes with advantages and drawbacks. A PIPE offers an easy way to raise a lot of money in a short amount of time. This can help kickstart an accumulation strategy. But it also creates the potential for these massive sell walls. Issuers could try a different method of selling stock, such as pre-registering shares with the SEC, but that can then take longer to raise the necessary funds. More companies today are taking a hybrid approach, where they might raise a third of the money via PIPEs, with the rest coming in convertible debt or credit facilities. These can delay selling pressure but also add more leverage to a balance sheet, which could be problematic if prices crash. 

But in this world where size and scale matters, companies will always feel pressure to raise as much as quickly as possible, which could mean going all in on a PIPE. It's going to continue being a Wild West out there, so investors should follow the advice of the institutional investor. “Just wait until there's enough liquidity [before buying]. People should not be speculating on how much higher the premium to NAV goes. They should be waiting for full liquidity and market pricing efficiency.”

Representatives for Sharplink, Bitmine, Asset Industries, Nakamoto/KindlyMD, and SRM Entertainment either did not respond to questions or did not make themselves available for an interview.

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