Crypto Treasury Impact on Bitcoin's Price Drop: An Analytical Perspective

The Impact of Crypto Treasuries on Bitcoin's Price Decline

Omid Malekan, a blockchain author and adjunct professor at Columbia Business School, suggests that discussions about Bitcoin's price drop should include the impact of crypto treasury companies, which have significantly contributed to this decline. Malekan stated in an X post on Tuesday, "Any analysis of why crypto prices continue to fall needs to include Digital Asset Treasuries (DATs)." He added that there are only a few companies that have tried to "create sustainable value. But I can count them on one hand." Analysts attribute the crypto market's decline to trade tensions between the US and China, along with other macroeconomic factors. Bitcoin (BTC) has fluctuated 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.

Companies Seeking Quick Gains Cause Problems

Many crypto-buying companies were able to raise millions from investors seeking exposure to crypto, and Malekan claimed that some of the individuals launching crypto treasury companies saw the model "as a get-rich-quick scheme." He added, "Launching any kind of public entity is expensive. The money required for the shell/PIPE/SPAC runs into the millions. As do the fees paid to all the bankers and lawyers involved." He stated, "The money spent on those fees had to come from somewhere." 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. This has sparked concerns that leveraged firms could exacerbate a market downturn by forced selling of assets.

Leveraged Acquisition and Mass Exit

Others have sought 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. Malekan claimed that "the biggest damage DATs did to aggregate crypto market cap was by providing a mass exit event for supposedly locked tokens." He added, "I’m still amazed so many other investors didn’t cry foul over this." He further stated 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 Booms in 2025

The number of crypto treasuries has increased significantly 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. Simultaneously, Ether (ETH), the second most adopted cryptocurrency for treasuries, has been added to the balance sheets of 70 companies, according to Strategic ETH Reserve data. Analysts told Cointelegraph that DATs will likely begin consolidating under a few larger players as the cycle matures and companies try to attract investors, while others speculate that the trend will see companies expand to other areas of Web3.