Bitcoin treasury appetite cools as Nakamoto (NAKA) faces scrutiny after wild stock run and crash Bitcoin treasury buying has lost momentum after a brief rebound in January, and one of the industry’s highest-profile treasury plays—Nakamoto (Nasdaq: NAKA)—is under fresh scrutiny following a spectacular equity run-up and collapse. Nakamoto’s chairman and CEO David Bailey has dismissed fraud allegations as “noise on Twitter” after NAKA’s share price plunged roughly 99% from its May peak. Bailey said the company’s strategy includes recent acquisitions of BTC Inc. (the parent of Bitcoin Magazine and The Bitcoin Conference) and UTXO Management, a bitcoin-focused hedge fund—both businesses Bailey previously founded. Those deals, plus other opaque capital moves, have drawn questions from market participants and retail investors. How the stock pumped and crashed - In May 2025 Nakamoto announced a merger with a little-known shell, KindlyMD. The news sent the stock from about $2 to over $30 in days—a roughly 1,400% spike. - Analyst Justin Bechler says early backers bought into the financing rounds at dramatically lower prices than retail did: first-round investors at $1.12 per share, a later round at $5 per share, while retail bought shares at $28+ during the frenzy. The financing rounds raised roughly $510 million plus $200 million in convertible notes, and an additional $51.5 million in the second round. - By the time the merger closed in August, early investors largely exited, leaving late retail buyers exposed as the stock collapsed. Collateral and governance concerns Beyond share-price dynamics, critics point to potentially risky borrowing arrangements and possible governance issues. Reports say Nakamoto entered overcollateralized loans that could put its 5,765 BTC treasury at risk of forfeiture—an outcome that would dilute value for NAKA shareholders. Some observers also question whether the purchases of BTC Inc. and UTXO Management were handled with full shareholder approval, raising further corporate-governance red flags. Market signals turn bearish The company’s market signals have deteriorated alongside bitcoin’s price weakness. Nakamoto’s mNAV—a metric comparing market capitalization to net asset value derived from its BTC treasury—has fallen below 1, indicating the market values the firm at less than its bitcoin holdings and signaling investor skepticism. More broadly, demand from BTC treasuries, which briefly rebounded in January, has cooled again. With ETF flows and macro volatility still moving the needle, treasuries’ purchasing power may be less reliable as a tailwind for bitcoin prices going forward. Industry reaction Analysts and market-watchers have reacted sharply. Felix Jauvin warned the sector needs to address perceived lapses, saying, “We have to pay for our DAT sins before we have a chance of being a serious industry again. Shame.” Meanwhile, Bailey continues to characterize social-media criticism as background chatter and defends the acquisitions and capital strategy. What to watch Key items to monitor include any disclosures around the loan covenants that could trigger BTC forfeiture, further details on the transactions that transferred ownership of BTC Inc. and UTXO Management, and whether regulators or exchanges probe the financing timeline and investor disclosures. The broader picture—how ETF flows and treasury demand evolve—will also influence whether bitcoin can sustain a recovery. This article is informational and not investment advice. Always do your own research before making trading decisions. Sources: posts by David Bailey on X, NAKA filings and TradingView price data, analysis from Justin Bechler, Blockworks reporting on mNAV, DeFiLlama treasury-flow charts. Read more AI-generated news on: undefined/news

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