According to Analytics Platform Crypto financing companies could raise capital in private investment (PIPE) transactions in Public Equity (Pipe) transactions, which could result in stocks falling by half due to sales pressure.
Cryptoquant said in a market report on Thursday that Cryptoquant said it was “stricken by major drawdowns and stock prices are often drawn to the pipe issue level” through pipe trading, which Cryptoquant said in its market report.
He added that some companies’ stocks are trading more than the pipe offer price, and that “we could face a decline of up to 50%” as investors are considering selling near the end of the lockup period.
Pipe trading allows private investors to buy new stocks below market price, popular among cryptocurrency companies, and quickly raise cash in the busy sector.
Pipe Flash companies face negative side risks
Cryptoquant said Pipe transactions will allow companies to access cash quickly and flexibly, but such transactions “can have a negative impact on the company’s stock performance” as investors aim to lock in profits.
“The pipe increases the amount of shares in circulation and dilutes existing shareholders,” he said. “When Pipe Investors is able to sell, the reselling of these new stocks creates an “overhang” that puts pressure on the stock price. ”
Cryptoquant analyzed the stocks of several Bitcoin (BTC) financing companies that have conducted pipe transactions and found that many people “have experienced significant inventory drawdowns, and stock prices often attract the pipe issuance level.”
Pinned “actual or expected sales from pipe investors” as the reason for the drawdown, pointing out that the healthcare company’s shares fell more than half in one day after BTC Ministry of Treasury’s kind MD (NAKA) was unlocked.
Cryptoquant said the kind MD stock rose from around $1.80 in late April to a high of nearly $35 in late May with the pipe announcement. However, since then, it has dropped 97% to a low of $1.16, and “is essentially touching the $1.12 pipe price.”
Other Cryptocurrency Ministry could bow
Cryptoquant noted that other pipe-backed cryptocurrency companies “appear to be heading in the same direction,” and saw the stock price fall after the pipe trading.
Shares in Strive Inc. (ASST) closed at $2.75 on Thursday, down 78% from the 2025 peak of $13 in late May.
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Cryptoquant said the Strive pipe priced at $1.35, “that means it implies a 55% price drop from the current level.”
Additionally, Cantor Equity Partners (CEP) is a blank checking company that has merged with finance company Twenty One Capital, priced the pipe at $10. It also fell nearly 20% from the high below $20, meaning that prices could fall by 50% from current levels.
Other analysts warn that even established cryptocurrency companies face pressure as the value of crypto holdings can creep towards the company’s value, causing a wave of sales.
“The sustained gatherings in Bitcoin are the only potential catalysts that can prevent further declines in these stocks. Without it, many are poised to continue trending towards or downwards in pipe prices,” Cryptoquant said.
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