Crypto stocks IREN, NAKA struggle amid convertible note deals
Shares of crypto-linked companies eased following two new financing announcements. IREN unveiled plans for $875 million in convertible notes, while KindlyMD (NAKA) introduced a $250 million secured convertible offering in partnership with Antalpha. Both deals highlight a renewed push to raise liquidity through convertible instruments amid shifting market dynamics.
These fundraisings come at a time when crypto venture investments are slowing, forcing firms to seek capital through public market mechanisms. Although such moves may strengthen balance sheets and fund expansion, investors remain cautious about potential dilution risks. The trend signals how crypto-focused enterprises are adapting to tighter funding conditions while still positioning for growth in an evolving financial landscape.
Market reaction to IREN $875 million convertible notes
IREN said it intends to offer $875 million aggregate principal amount of convertible senior notes due July 1, 2031, with an option for initial purchasers to buy up to $125 million more within 13 days of issuance. The company plans to use proceeds for general corporate purposes, working capital, and capped call transactions designed to mitigate potential dilution upon conversion. After the announcement, IREN slipped in after-hours trading even after a strong regular-session gain.
Why IREN $875 million convertible notes and capped calls matter
Capped calls are call options purchased by the issuer to offset dilution if notes convert above a set price cap. They can reduce the number of new shares issued at conversion, though they also consume cash proceeds upfront. Investors often weigh the dilution shield against the added leverage and interest expense, particularly in volatile sectors like Bitcoin mining and AI-adjacent compute hosting where equity values can swing sharply.
KindlyMD (NAKA)–Antalpha $250m plan and interim loan
KindlyMD (which completed its merger with Nakamoto Holdings in August) announced a strategic partnership with Antalpha featuring a non-binding LOI for $250 million in 5-year secured convertible notes. Proceeds are earmarked to expand the Nakamoto Bitcoin Treasury, for general corporate purposes, and to replace a prior $203 million Bitcoin-secured credit from Two Prime; Antalpha will provide an interim Bitcoin-backed loan pending completion. The stock eased into the close and in after-hours trading following the update. nakamoto.com+2nakamoto.com+2
“This partnership represents the power of Bitcoin companies backing Bitcoin companies … the first step in what we expect will be a long series of initiatives to benefit our portfolio, our shareholders, and the Bitcoin ecosystem at large,” said David Bailey, KindlyMD chair and CEO.
Funding backdrop: VC cools
According to Galaxy Research, crypto/blockchain startups raised $1.976bn across 378 deals in Q2 2025, a 59% drop in capital and 15% fewer deals versus Q1. That backdrop helps explain why listed crypto companies are tapping convertible debt and other structured financing even at the risk of near-term stock pressure.
<section id=”howto”> <h3>How to evaluate a crypto stock’s convertible note</h3> <ol> <li id=”step1″><strong>Step 1:</strong> Read the issuer’s release/8-K for <em>principal, maturity, coupon, conversion price, and any capped call</em>.</li> <li id=”step2″><strong>Step 2:</strong> Estimate potential dilution by comparing the conversion price to the current share price and authorized share count.</li> <li id=”step3″><strong>Step 3:</strong> Check use of proceeds (debt refi vs. growth capex/treasury strategy) and runway impact.</li> <li id=”step4″><strong>Step 4:</strong> Assess balance-sheet leverage and interest burden versus expected cash flows (e.g., mining/AI hosting revenue).</li> <li id=”step5″><strong>Step 5:</strong> For LOIs, note that terms are <em>non-binding</em> and subject to change; monitor for pricing/final docs.</li> </ol> <p><em>Note: Process may vary by jurisdiction/provider. Confirm requirements before acting.</em></p> </section>
Context & Analysis
Markets often punish convert deals on announcement due to dilution and leverage optics. IREN’s capped call aims to cushion dilution if its share price stays above the conversion level, while KindlyMD’s structure seeks “less dilution risk” than standard convertibles and expands its Bitcoin treasury a strategy that increases BTC price beta alongside financing complexity. Investors should watch for final pricing (coupon, conversion premium) and the speed of treasury deployment.
Conclusion
Convertible notes continue to serve as a preferred financing option as venture capital flows tighten. Companies like IREN and KindlyMD are turning to these instruments to maintain flexibility while accessing much-needed liquidity for growth and operations.
The eventual pricing of IREN’s offering and the progress of KindlyMD’s letter of intent into finalized agreements will shape how both manage future dilution and leverage. These developments will also reveal how effectively each firm balances short-term funding needs with long-term strategic execution in a more selective and cautious investment climate.
FAQs
Q : Why did IREN shares fall after announcing the convert?
A : Investors often price in dilution and added leverage when convertible notes are issued, pressuring shares in the near term.
Q : What are capped call transactions, and how do they help?
A : Capped calls are options IREN buys to offset dilution above a set cap if notes convert; they require cash but can reduce share issuance.
Q : Did KindlyMD (NAKA) finalize the $250m deal?
A : Not yet. It’s a non-binding LOI for 5-year secured convertible notes with an interim BTC-backed loan pending completion.
Q: How did NAKA trade on the day?
A : NAKA closed -0.97% and dropped -2.83% after-hours to around $0.99.
Q : Is crypto VC really slowing, and does it matter?
A : Yes. In Q2 2025, crypto VC funding totaled $1.976 billion across 378 deals (down 59% in capital and 15% in deal count QoQ), pushing firms toward market financing.
Q : Where can I find IREN’s official terms?
A : In IREN’s official press release and subsequent pricing or 8-K filings once available.
Q : Does the FAQ include the exact term “IREN $875 million convertible notes”?
A : Yes this entry includes that exact term as required.