David Bailey, the crypto entrepreneur who helped secure Donald Trump’s support for Bitcoin, is working to stabilize his public company Nakamoto Inc. after its shares fell about 99% from their peak. The firm, created to accumulate the cryptocurrency, has reported heavy losses and is now prioritizing acquisitions that generate cash flow over further equity-financed Bitcoin purchases.

From Rapid Rise to Sharp Decline

About a year ago, Bailey raised roughly $760 million for a public vehicle designed to stockpile Bitcoin. His hedge fund had previously delivered returns of 640% on similar strategies. The company took shape through a May 2025 merger announcement involving Bailey’s Nakamoto Holdings and healthcare firm KindlyMD, initially supported by a large private investment and convertible notes.

Shares surged after the deal was unveiled but have since collapsed as part of a wider selloff among digital-asset treasury companies. Investors who once paid a premium to gain Bitcoin exposure through publicly traded entities have largely withdrawn that premium. Nakamoto’s stock now trades below the value of the Bitcoin it holds on its balance sheet, removing the incentive to issue new shares to buy more of the cryptocurrency.

Financial Pressure and Operational Adjustments

Nakamoto reported a net loss of $371.8 million for the first six months of 2026. At the end of June, it held about 4,467 Bitcoin valued at roughly $261.5 million. Pressure on the balance sheet prompted the company to reduce leverage rather than continue accumulating the asset. It sold approximately 600 Bitcoin and related derivative positions for about $48 million in net proceeds, using much of the money to repay $45 million of Bitcoin-backed debt. It ended the period with $19.1 million in cash and $164.7 million in total debt.

To maintain its Nasdaq listing, the company completed a 1-for-40 reverse stock split in May. Outstanding shares fell from about 696.1 million to approximately 17.4 million. The board later authorized a share repurchase program of up to $25 million, reflecting a preference for buying back discounted stock. The firm also refinanced a portion of its debt, extending about 105 million USDT of principal until June 2027.

The broader sector has suffered sharp losses. An analysis found that companies focused on holding Bitcoin had lost more than $80 billion in market value since mid-2025 as premiums over their cryptocurrency holdings disappeared.

Pivot Toward Cash-Flow Businesses

Bailey has said Nakamoto is searching for acquisitions that can improve income and cash flow while still supporting its Bitcoin strategy. With the stock trading at a discount to the value of its holdings, raising capital through share issuance for additional cryptocurrency purchases has become far less attractive. Instead, the company aims to use operating income from acquired businesses to fund any future Bitcoin activity.

In February, Nakamoto completed acquisitions of BTC Inc. and UTXO Management, two Bailey-linked businesses, issuing stock valued at about $81.6 million. Those deals brought media, conference, and asset-management operations under the public company. Bailey has described the moves as part of a longer-term plan to build a sustainable platform beyond pure treasury accumulation.

Bailey has also acknowledged that purchasing Bitcoin near its peak proved costly. Bitcoin later fell below $60,000 before recovering toward $80,000. He has stated that the company is focused on elements it can control while remaining periodically in contact with White House officials and engaged in outreach to the Bitcoin community ahead of the November midterm elections.

Nakamoto has closed its legacy healthcare clinics and reclassified those operations as discontinued, completing its shift away from the original KindlyMD business. Adjusted operating results in the second quarter turned positive when certain non-cash items were excluded, though the company continues to report overall net losses.

Outlook and Sector Context

Bailey has expressed confidence in the years ahead for Bitcoin and the business. He continues to position Nakamoto as a Bitcoin-focused operating company rather than a pure holding vehicle. The firm ranks among the larger public holders of Bitcoin, though most of its coins remain pledged as collateral against outstanding debt.

The experience of Nakamoto illustrates the rapid reversal for many digital-asset treasury stocks that rode early enthusiasm for corporate Bitcoin strategies. As premiums vanished and prices declined, those firms faced balance-sheet constraints, listing pressures, and the need to generate real operating cash rather than rely on continuous equity issuance.