Quick Breakdown
- •Crypto treasuries have become a hidden driver in Bitcoin’s price decline by enabling large-scale token exits.
- •Many treasury firms relied on leverage and hype, raising funds through costly public deals and debt issuances.
- •The crypto treasury trend continues to grow, but analysts expect consolidation as weaker players fall off.
Conversations about Bitcoin’s recent price slump are overlooking a critical force behind the downturn, according to blockchain author and Columbia Business School adjunct professor Omid Malekan. He argues that crypto treasury companies — firms that raise capital to acquire digital assets — have become a hidden driver pushing prices lower, not higher.
Any analysis of why crypto prices continue to fall needs to include DATs, because in aggregate they turned out to be a mass extraction and exit event – a reason for prices to go down. There are a few exceptions, projects that actually tried to execute the playbook my friend and…
— Omid Malekan 🧙🏽♂️ (@malekanoms) November 4, 2025
Bitcoin has been trading within a volatile band between $99,600 and $113,560 over the past week, a notable retreat from its October 6 record high above $126,000. While analysts have cited U.S.–China trade tensions and broader macro pressures, Malekan says the internal dynamics of the crypto market deserve equal attention.
Companies Chasing Hype Over Value
Malekan criticized the motivations behind many digital asset treasury (DAT) firms, suggesting that a wave of companies entered the market not to build, but to capitalize on speculation.
He explained that going public through structures like SPACs or PIPE deals comes with heavy legal and banking fees, meaning many firms needed significant capital inflow before they even bought crypto.
To fund their purchases, many treasury firms used leverage — borrowing against share sales, issuing debt, or using convertible notes. This structure can amplify gains during bull runs but also risks forced asset sales when markets drop, putting additional downward pressure on prices.
Unlocking Tokens Became a “Mass Exit Event”
Malekan also argued that the rise of treasury-backed buying flooded the market with liquidity that enabled large holders to exit positions that were previously illiquid or locked.
He compared the over-production of ecosystem tokens to an infection spreading through the market.
“Raising too much money and minting too many tokens — even locked — is the gangrene of crypto.”
Despite the concerns, the trend has accelerated. Bitwise reported in October that 48 new companies added Bitcoin to their balance sheets this year, pushing the total to 207 firms holding over one million BTC — roughly $101 billion worth.
Ethereum has followed a similar trajectory, with 70 companies now holding over 6.14 million ETH, valued above $20 billion.