Two prominent crypto-linked companies — Bitcoin mining giant IREN and Bitcoin treasury firm Kindly MD (NAKA) — faced negative market reactions on Tuesday after announcing large convertible note financing deals worth more than $1 billion combined, raising concerns among investors about potential share dilution.

IREN, formerly known as Iris Energy, saw its shares climb 6.81% during regular trading but dropped nearly 5% after hours to $58.66 following the announcement of an $875 million convertible senior note offering.

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Meanwhile, Kindly MD, a recently merged entity combining David Bailey’s Bitcoin company Nakamoto with healthcare firm Kindly, revealed it entered into a $250 million, five-year convertible note deal with fintech firm Antalpha. The news pushed its stock down 0.97% during trading and an additional 2.83% after hours to $0.99.

The deals come amid tightening liquidity in the broader crypto sector. According to Galaxy Research, venture capital funding for digital asset startups dropped 59% last quarter, alongside a 15% decline in overall deal volume — reflecting investor caution following a wave of market volatility and regulatory uncertainty.

IREN Raises $875M for Growth and Capped Call Protection

IREN said proceeds from its offering would go toward general corporate purposes, including working capital and capped call transactions — a hedging mechanism designed to limit share dilution when convertible debt is exchanged for equity.

The company added that an extra $125 million worth of notes may be offered to initial purchasers, all of which could later convert into ordinary shares.

In a statement, IREN emphasized that the capped call structure “is intended to reduce potential dilution to IREN’s ordinary shares upon conversion of the notes,” addressing investor concerns.

Still, such financing deals often prompt caution among shareholders, as convertible instruments effectively increase the total number of outstanding shares, potentially reducing existing shareholders’ proportional ownership and voting power.

Kindly MD Seeks to Expand Bitcoin Treasury

Kindly MD’s deal with Antalpha, a financial firm known for supporting Bitcoin-native companies, is structured to provide more flexible funding with lower dilution risks compared to traditional convertible debt.

According to the company, proceeds from the financing will be used to expand its Bitcoin holdings under the KindlyMD Bitcoin Treasury and support broader corporate operations.

The firm also plans to replace its existing $203 million Bitcoin-backed loan from Two Prime Lending Limited with proceeds from the new arrangement, improving liquidity and balance sheet stability.

Pending final approval, Antalpha will issue an interim Bitcoin-backed loan to Kindly MD, offering immediate capital access while the convertible debt facility is finalized.

Source: Nakamoto

Kindly MD founder David Bailey hailed the partnership as a milestone for Bitcoin-focused corporate finance:

“This partnership represents the power of Bitcoin companies backing Bitcoin companies. It not only meets today’s financing needs but lays the foundation for future structures tailored to Bitcoin treasury firms.”

Bailey said the move is the first of several initiatives aimed at strengthening the company’s portfolio, improving shareholder value, and supporting the broader Bitcoin ecosystem.