Nakamoto Holdings, which merged with healthcare company KindlyMD in August, has experienced a staggering decline, with shares plummeting more than 50% in just one day, following a recent unlocking of PIPE shares. This event allowed insiders, who initially purchased shares at $1.12, to sell off their holdings, leading to significant turbulence in the stock market. Since May, when shares peaked at approximately $34, Nakamoto’s stock has nosedived 96%, presently trading around $1.50.
This sharp downturn is being viewed as a substantial setback for the burgeoning trend of companies accumulating Bitcoin as part of their financial strategy. Analysts have remarked that the so-called “crypto treasury narrative” surrounding Bitcoin investments in corporate structures seems to have been fundamentally damaged. Scott Melker, a well-known trader in the cryptocurrency space, encapsulated the sentiment in a recent newsletter, stating that the decline is so drastic it could overshadow a July 4th fireworks display.
Approximately one in three of the 170 firms engaged in the Bitcoin treasury landscape now find themselves trading below the market value of their Bitcoin holdings. Some companies are reportedly resorting to creative accounting methods to evade potential delisting from the New York Stock Exchange, highlighting the precarious position many Bitcoin treasury firms are in.
The catalyst for Nakamoto’s rapid decline was the PIPE unlock—a private investment mechanism allowing select investors to buy shares at a predetermined price. After witnessing substantial momentum in their stock price, insiders began liquidating their investments once the shares became freely tradable. In an attempt to reassure investors, David Bailey, CEO of Nakamoto, addressed the situation in a late-night message, characterizing the volatility as “not unusual” despite the drastic devaluation of their shares.
Adding complexity to the situation is the fact that KindlyMD, which was central to Nakamoto’s rise, had only begun accumulating Bitcoin in late August despite the merger announcement happening much earlier in May. Currently, KindlyMD holds 5,765 Bitcoin, valued approximately at $665 million, making it the 16th largest corporate holder of the cryptocurrency. This move aligns with a growing trend of corporations integrating Bitcoin into their balance sheets as a potential business model.
Bailey, previously celebrating the company’s Bitcoin investments, once claimed in a podcast that their investments had performed astonishingly well. He expressed confidence in expanding Bitcoin treasury initiatives globally, listing various countries as potential markets. However, the recent collapse raises questions about the sustainability and viability of such models, especially since KindlyMD reported only a modest revenue of less than $10 million for the second quarter of 2025.
The cautionary signs leading up to this collapse were noted by industry analysts who questioned the underlying business logic of a healthcare firm heavily investing in Bitcoin. Other companies in the sector, such as Metaplanet and retail giant GameStop, have similarly taken on massive debt to acquire Bitcoin without clear business models, raising concerns about the durability of these ventures.
Despite Nakamoto’s downfall, experts suggest that this incident alone will not extinguish the Bitcoin treasury trade. However, retail investors who participated at the height of the hype may face significant losses, illustrating the risks associated with speculative investments in the cryptocurrency space. The lesson is clear: not every company can emulate MicroStrategy’s success in the Bitcoin market.
