Crypto treasury companies have significantly contributed to Bitcoin’s recent price drop by enabling mass extraction of value from the market, according to blockchain expert Omid Malekan. These firms raised substantial funds but often prioritized quick exits over sustainable growth, exacerbating market declines amid macroeconomic pressures.
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Crypto treasury companies, or DATs, have accumulated over one million Bitcoin tokens worth more than $101 billion, per Bitwise data.
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Experts argue these entities created exit events for locked tokens, draining liquidity from the crypto market.
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Bitcoin’s price has fluctuated between $99,607 and $113,560 in the past week, down from a high of over $126,000 on October 6, influenced by trade tensions and these corporate strategies.
Discover how crypto treasury companies are impacting Bitcoin prices in 2025. Learn expert insights on market declines and sustainable strategies. Stay informed on crypto trends today.
How Do Crypto Treasury Companies Impact Bitcoin Prices?
Crypto treasury companies have played a notable role in Bitcoin’s price fluctuations by accumulating large holdings through leveraged financing, which can lead to forced sales during downturns. According to Omid Malekan, adjunct professor at Columbia Business School and blockchain author, these firms often facilitate mass value extraction, contributing to overall market declines. While some macroeconomic factors like US-China trade tensions are at play, the strategies of these companies amplify the pressure on prices.
Columbia Business School adjunct professor Omid Malekan claimed there are a few crypto buying companies that tried to “create sustainable value. But I can count them on one hand.”
Discussions surrounding Bitcoin’s ongoing price decline must consider the influence of crypto treasury companies, which have actively worsened the market’s trajectory, as noted by 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 stated 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 further emphasized that only a handful of such companies have genuinely attempted to “create sustainable value,” a number he says can be counted on one hand.
Market observers have pointed to escalating trade tensions between the United States and China, alongside broader macroeconomic challenges, as key drivers behind the crypto sector’s slump. Bitcoin (BTC), for instance, has seen volatility between $99,607.01 and $113,560 over the last seven days, retreating from its all-time high of over $126,000 reached on October 6, based on data from CoinGecko.
Source: Omid Malekan
Why Are Crypto Treasury Companies Entering the Market for Questionable Reasons?
Many crypto treasury companies secured millions in funding from investors eager for cryptocurrency exposure, but Malekan suggests that several founders viewed this model primarily as a “get rich quick scheme.” Launching public entities comes at a high cost, he explains, with expenses for shells, PIPE deals, and SPACs reaching into the millions, plus substantial fees for bankers and lawyers.
“The money spent on those fees had to come from somewhere,” Malekan noted. These companies have amassed significant portions of top cryptocurrencies’ supplies by leveraging share sales, convertible notes, and debt instruments. This approach raises alarms, as over-leveraged firms might trigger asset liquidations during market corrections, intensifying downturns.
Some of these entities attract investors by yielding returns on holdings via staking, while others plan to allocate assets to decentralized lending and liquidity protocols. However, Malekan warns that the most severe harm from digital asset treasuries stems from enabling widespread exits for supposedly restricted tokens. “I’m still amazed so many other investors didn’t cry foul over this,” he remarked.
Over-raising capital and issuing excess tokens—even if intended for locked periods or ecosystem development—represents a core vulnerability in the crypto space, according to Malekan, likening it to a spreading infection that undermines long-term stability.
Related: Are struggling firms using crypto reserves as a PR lifeline?
Frequently Asked Questions
What Role Do Crypto Treasury Companies Play in the 2025 Market Expansion?
The trend of crypto treasury companies surged in 2025, with Bitwise’s October report identifying 48 new adopters adding Bitcoin to their balance sheets, bringing the total to 207 firms holding more than one million tokens valued at over $101 billion. This growth reflects broader corporate interest in digital assets as a hedge, though it introduces risks tied to leverage and market volatility.
How Has Ethereum Adoption by Treasuries Compared to Bitcoin in Recent Months?
Ether (ETH) ranks as the second-most popular choice for corporate treasuries, with 70 companies incorporating it into their reserves, per Strategic ETH Reserve data. These holdings total 6.14 million ETH, amounting to more than $20 billion, highlighting Ethereum’s appeal for its utility in decentralized applications alongside Bitcoin’s store-of-value role.
Key Takeaways
- Market Impact of DATs: Crypto treasury companies have driven Bitcoin’s decline through value extraction and leveraged buying, as highlighted by expert Omid Malekan.
- Growth Statistics: Over 200 firms now hold more than $101 billion in Bitcoin, with Ethereum treasuries adding another $20 billion, per reports from Bitwise and Strategic ETH Reserve.
- Future Outlook: As the market evolves, consolidation among larger players may occur, urging investors to prioritize sustainable strategies over short-term gains.
Conclusion
In summary, crypto treasury companies have undeniably influenced Bitcoin’s price trajectory in 2025 by amplifying market pressures through aggressive accumulation and potential exit strategies, as articulated by Columbia Business School’s Omid Malekan. While macroeconomic factors like US-China trade frictions persist, the role of these digital asset treasuries underscores the need for prudent, value-driven approaches in corporate crypto adoption. Looking ahead, investors should monitor consolidation trends and focus on firms building genuine ecosystem contributions to navigate ongoing volatility effectively.
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.”
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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