PIPE Trading and Encryption Vault: Public Companies are Transforming into On-chain Protocols

The concept of encrypted vaults is undergoing a revolutionary transformation. From simple Bitcoin holdings, they have evolved into a new paradigm of multi-chain, native staking, and token dividends. This transformation is not just an internal development within the encryption industry, but a signal that traditional Wall Street firms are beginning to mimic and adopt on-chain protocol operations.

This article will delve into one of the hottest trends in the current encryption market: the phenomenon of PIPE trading and publicly listed companies significantly allocating crypto assets. From a well-known blockchain project landing on NASDAQ through a reverse merger, to emerging DeFi platforms using tokens as core assets and staking targets, these changes are blurring the lines between "publicly listed companies" and "crypto-native protocols."

PIPE Trading Overview

PIPE is an abbreviation for "Private Investment in Public Equity," which refers to private investors injecting capital into publicly listed companies at a discounted price. This method is favored for its speed and simplicity, allowing it to bypass the cumbersome processes of traditional IPOs.

In the field of encryption, PIPE trading is becoming the preferred method for projects to go public or expand their influence. It is often combined with "reverse mergers," providing a fast track for crypto projects to go public. Projects can bypass the time-consuming roadshows and complex bank negotiations, quickly becoming public companies and gaining global attention.

Iconic Case Study

capital operation of a well-known blockchain project

Recently, the founder of a blockchain project renamed a Nasdaq-listed company through a reverse merger and plans to complete PIPE financing with a project token valued at 100 million USD. This not only makes the project token the core asset of the company but also suggests the possibility of introducing a token-based dividend mechanism in the future.

It is worth noting that the founder's father will serve as the chairman of the board, and there are rumors that a member of a certain political family may join the company's senior management. This PIPE deal merges financial, political, and familial elements, showcasing the founder's consistent style. Looking back, the founder has always kept up with market trends, replicating popular models and commercializing them, allowing their projects to maintain a leading position across multiple market cycles.

Medical technology company transforms into a DeFi platform

Another striking case is a company originally focused on eye drop technology transforming into a DeFi platform. The company plans to hold a large number of tokens from emerging DeFi projects and operate native staking validation nodes, actively participating in network construction. The company has also hired professionals from the encryption industry to serve as the new CEO, leading the transformation.

In addition, the company may obtain an additional $100 million in token subscription rights through a second round of PIPE transactions, potentially increasing its encryption asset holdings to over $150 million. All of this occurs within less than a year of the related token's launch, making it one of the fastest allocations in encryption assets.

New Trends in Multi-Chain Asset Allocation

A certain investment group announced plans to allocate multi-chain token assets, totaling up to $600 million. Although complete details have not yet been made public, it is confirmed that the tokens of emerging DeFi projects will become one of its core assets. This "multi-currency treasury" strategy is becoming a new paradigm for corporate asset allocation, contrasting sharply with the past practice of only holding Bitcoin. Nowadays, various emerging public chains are also beginning to enter the sight of listed companies, providing more diversified asset growth avenues for enterprises.

Global Encryption Vault Trend

The trend of publicly listed companies establishing encryption vaults has become global and is no longer limited to Bitcoin:

• France: A certain blockchain group holds approximately 1,600 BTC, becoming one of the best-performing stocks in France, with a market value about three times that of its Bitcoin holdings.

• Japan: A company known as "the Japanese version of MicroStrategy" holds 10,000 bitcoins, with its stock price being nearly 7 times the value of its bitcoin holdings.

• Hong Kong: An investment company supported by the founder of a well-known Internet company recently included a certain emerging public chain token in its vault, resulting in a stock price increase of about 30%, and the current market value is 222 times the value of its token holdings.

By comparing the net asset value multiples of these companies, we can gain insight into the varying market demand for encryption assets. For example, the 7x premium of Japanese companies is much higher than the 3x of French companies, indicating a stronger demand for such investment targets in the Japanese market.

The Significance of Transformation

The PIPE trading and token vault strategies are no longer a fleeting trend, but a fundamental shift in the way publicly listed companies are entering the encryption space. The key trends we are experiencing include:

1. The encrypted vault becomes a market signal: publicly traded companies holding specific tokens is not only financial management but also a market statement and ecological alliance.

2. The rise of token-native listed companies: treasury assets expand from Bitcoin to various emerging public chains and DeFi tokens, forming a multi-token strategy bound to specific ecosystems.

3. PIPE transactions are becoming the standard pathway: "backdoor listings" into the encryption world are becoming standard practice, offering advantages of speed and high flexibility.

4. Institutions bet on a multi-chain future: Institutional actions indicate that companies are no longer only betting on Bitcoin, but are choosing a diversified layout closely integrated with various ecosystems.

We are witnessing the emergence of a new batch of public companies that operate under the rules of Web3 while performing on the stage of traditional capital markets. This is not only a shift in corporate strategy but also an innovation in the operational paradigm of capital markets. In the future, it is possible that every mainstream encryption project will have a corresponding "public representative." And this is just the beginning.