Columbia Business School’s Omid Malekan says crypto treasury companies deepened the downturn by selling tokens and draining value.
Crypto treasury companies are facing criticism for their role in the ongoing market downturn.
Columbia Business School adjunct professor Omid Malekan says that digital asset treasury companies, which buy and hold assets like Bitcoin and Ethereum have made the market more fragile rather than stronger.
In a series of comments shared on X, Malekan argued that crypto treasury companies have become a “mass extraction and exit event.”
Instead of stabilising the market or building sustainable value, many have done the opposite.
How Crypto Treasury Companies Cork
A crypto treasury company, sometimes called a digital asset treasury (DAT), is a public company that raises capital to buy cryptocurrencies for its balance sheet. Some of the most recognised names in this space include MicroStrategy, Marathon Digital Holdings, Riot Platforms and CleanSpark.
The concept sounds simple. The companies raise money, buy crypto and benefit as the assets appreciate.
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
Yet according to Malekan, the execution has often gone wrong. Many companies have used leverage, debt and share sales to purchase Bitcoin or Ether. As a result, these have worsened the risks when prices fell.
“Any analysis of why crypto prices continue to fall needs to include DATs,” Malekan said. “They turned out to be a mass extraction and exit event — a reason for prices to go down.”
Misaligned Motives Behind the Buying Spree
Malekan believes that a large number of crypto treasury companies entered the market for the wrong reasons. He said that while a few aimed to build long-term value, most saw the idea as a quick route to wealth.
Launching a public investment vehicle is expensive. There are things like legal filings, banker fees and advisory contracts to worry about, and some of them can cost millions.
“The money spent on those fees had to come from somewhere,” Malekan explained.
In many cases, it came directly from the capital raised from investors, not from genuine business activity.
He also claimed that many founders behind these treasuries used buzzwords and vague presentations to attract investors. He said that the lack of transparency allowed some teams to funnel funds into vanity projects or aggressive marketing, instead of creating useful products.
Market Fallout and Investor Frustration
The recent market downturn has hit hard. Bitcoin has dropped nearly 5% to around $101,500, while Ethereum has fallen close to 6% according to CoinGecko. The global crypto market capitalisation now stands at roughly $3.62 trillion.
Malekan argues that this crash cannot be blamed entirely on macroeconomic issues or tensions between major economies. Instead, he said the dynamics of the crypto industry, including reckless behaviour from crypto treasury companies are partly responsible.
By releasing “locked” tokens into circulation and inflating supply, these treasuries effectively triggered a wave of selling.
“The biggest damage DATs did to the aggregate crypto market cap was by providing a mass exit event for supposedly locked tokens,” he said.
A Surge in Treasuries, But Not in Trust
Despite criticism, the number of treasuries has surged. A report from Bitwise Asset Management noted that by October, 207 companies had added Bitcoin to their balance sheets.
Together, they collectively hold over one million tokens worth more than $100 billion.
Ethereum has also become a favourite for treasuries. Data from Strategic ETH Reserve shows that 70 companies now hold over 6 million Ether, valued at more than $20 billion.
However, this rise has not been matched by improved governance or investor confidence. Analysts expect that as the market matures, crypto treasury companies will consolidate and leave only a few large players.
Others will likely disappear or pivot to different areas of Web3.