Nakamoto Stock Crashes 96% Amid Bitcoin Treasury Selloff

Nakamoto's (NAKA) shares fell 60% over the weekend, reaching an all-time low of $1.16. This drop marked a 96% decline from the peak of $34.77 achieved on May 22. The stock's volatility has tested the resolve of both retail and institutional holders in the Bitcoin space.

David Bailey, CEO of the merged entity involving KindlyMD and Nakamoto Holdings, has been vocal about the situation. He shared on X that he took a mental health break last week amid the pressure from the falling share price. Bailey described the ongoing selling as a process to strengthen the shareholder base and urged committed investors to stay the course.

The company's SEC filing reveals substantial private share allocations to prominent figures in the Bitcoin community. These include Adam Back with 8,928,572 shares, Balaji Srinivasan with 273,038 shares, and Jameson Lopp with 1,340,000 shares. Other notable recipients are Clark Moody, Mark Yusko, and H. Eric Semler, who received shares for advisory roles or private placements.

These allocations have played a key role in the price movement as holders began selling after restrictions lifted. The filings indicate that many private investors acquired shares at prices as low as $1.12, allowing them to sell at higher levels without significant loss. This dynamic has amplified the downward pressure on the stock, particularly affecting retail investors who entered at elevated prices.

Bailey addressed shareholders in a letter released on Monday, emphasizing the importance of conviction during tough times. He noted that the public Bitcoin treasury model faces ongoing tests but remains grounded in core principles. The CEO encouraged short-term traders to consider exiting, framing the current phase as a transition toward better alignment among long-term backers.

Trading volume for NAKA surged above 89 million shares on Monday, the highest since a rally on February 12 that saw 219 million shares traded. This spike reflects heightened activity as the market digests the recent developments. While the stock has seen a slight rebound of a few cents following the letter, the overall sentiment remains cautious.

Shareholder Dynamics and Market Pressure

The involvement of early Bitcoin advocates has added layers to the narrative around NAKA's performance. Figures like Adam Back and Jameson Lopp, known for their contributions to Bitcoin, hold large positions that influence market dynamics. Their sales, enabled by the advisory share structure, have contributed to the rapid price erosion over recent months.

Retail investors have borne the brunt of these shifts, with many facing near-total losses on their investments. The disparity between private placement pricing and public market entry points has highlighted tensions in the structure of cryptocurrency-linked equities. Bailey's communications aim to rally those who believe in the long-term vision of building a network of Bitcoin treasury companies.

Nakamoto's strategy extends beyond simple holdings, targeting acquisitions worldwide to create a global Bitcoin-focused conglomerate. The company recently committed $30 million to Metaplanet, Japan's leading Bitcoin treasury firm, marking its largest single investment. Such moves underscore the ambition to expand influence in institutional finance, even as the stock navigates volatility.

The broader Bitcoin treasury trend, popularized by companies like Saylor's Strategy, continues to evolve. Nakamoto's approach seeks to scale this model by investing in other treasury operators. However, the recent events serve as a reminder of the risks in blending public markets with cryptocurrency exposure.

As the company moves forward, Bailey's focus on productivity during downturns suggests internal progress despite external challenges. Meetings with private investors are underway, with many expressing intent to hold through the period. The path ahead involves balancing share unlocks and strategic investments to rebuild stability.

Investors in the space are watching closely to see if NAKA can stabilize and align with its Bitcoin accumulation goals. The firm's holdings now exceed $665 million in BTC value, outpacing some peers in the treasury rankings. Yet, with the market cap trading at a discount to these assets, questions persist about valuation and future trajectory.