Conversations about Bitcoin’s price drop should include the impact of crypto treasury companies, which have contributed to the decline, argues Omid Malekan, a blockchain author and adjunct professor at Columbia Business School.
“Any analysis of why crypto prices continue to fall needs to include DATs [digital asset treasuries],” Malekan said in an X post on Tuesday. “In aggregate they turned out to be a mass extraction and exit event — a reason for prices to go down.”
He added that there are a few companies that have tried to “create sustainable value. But I can count them on one hand.”
Analysts have blamed trade tensions between the US and China, along with other macroeconomic factors for the crypto market’s decline, which has seen Bitcoin (BTC) fluctuate between $99,607.01 and $113,560 over the last seven days, trading down from its Oct. 6 all-time high of over $126,000, according to CoinGecko
Source: Omid Malekan
Companies in it for wrong reasons causing problem
Many crypto buying companies were able to raise millions from investors looking for exposure to crypto, and Malekan claimed that some of the people launching crypto treasury companies saw the model “as a get rich quick scheme.”
“Launching any kind of public entity is expensive,” he added. “The money required for the shell/PIPE/SPAC runs into the millions. As do the fees paid to all the bankers and lawyers involved.”
“The money spent on those fees had to come from somewhere,” he said.
Crypto treasury companies have been acquiring a substantial supply of tokens across the top cryptocurrencies, utilizing leverage through share sales, convertible notes, and debt offerings to do so, which has sparked concerns that leveraged firms could exacerbate a market downturn by forced selling of assets.
Others have looked to entice investors by generating yield on their holdings through measures such as staking, while some have flagged plans to deploy part of their holdings into crypto protocols for lending and liquidity provision purposes.
“The biggest damage DATs did to aggregate crypto market cap was by providing a mass exit event for supposedly locked tokens,” Malekan claimed. “I’m still amazed so many other investors didn’t cry foul over this.”
He added that “raising too much money and minting too many tokens even if they are locked or for ecosystem growth is the gangrene of crypto.”
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Crypto treasury trend explodes in 2025
The number of crypto treasuries has exploded this year, with an October report from asset manager Bitwise tracking 48 new instances of companies adding Bitcoin to their balance sheets, totaling 207 overall, and collectively holding over one million tokens, worth over $101 billion.
At the same time, Ether (ETH), the second most adopted cryptocurrency for treasuries, has been added to 70 companies’ balance sheets, according to Strategic ETH Reserve data. Collectively, they hold 6.14 million Ether, worth over $20 billion.
Analysts told Cointelegraph that DATs will likely start consolidating under a few larger players as the cycle matures and companies try to attract investors, while others speculate the trend will see companies expand to other areas of Web3.
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