Crypto treasury companies accelerating market drop, professor argues
As crypto prices cooled following October’s peak, analysts reignited debate around the role of crypto treasury companies also known as digital asset treasuries (DATs) — in the market’s pullback. Some observers suggest these entities, which manage large token reserves and liquidity operations, may have amplified selling pressure as sentiment weakened.
Columbia Business School adjunct professor Omid Malekan argues that most DATs prioritized short-term profit rather than long-term growth. He describes their activity as a “mass extraction and exit event,” suggesting that only a few were genuinely designed to create sustainable value within the crypto ecosystem. This perspective has fueled broader questions about whether DATs serve innovation or simply accelerate boom-and-bust cycles.
What happened and why it matters
Malekan says analysts fixate on macro drivers U.S. China tensions, rates, and risk sentiment—while underplaying DATs’ role. He argues many firms raised sizable capital, paid hefty fees to bankers and lawyers, leveraged up via share sales and notes, then contributed to sell pressure when de-risking or when previously “locked” tokens became effectively liquid.
Meanwhile, corporate participation surged through 2025. Roundups referencing Bitwise research show 48 new BTC treasuries added in Q3, ~207 total, and 1M+ BTC held collectively; ETH treasuries span ~70 entities with ~6.14M ETH (≈$20B). Proponents say this deepens institutional participation; critics warn leverage and mark-to-market risk can amplify drawdowns. coinglass+2Binance+2
Market backdrop
Bitcoin set a new all-time high above $125k on Oct. 5–6 before easing lower; CoinGecko’s trackers and mainstream outlets reported the milestone. In the past week, BTC traded roughly in a wide five-figure band, consistent with a post-peak consolidation.
How DATs fit into the market structure
Mechanics and incentives
DATs typically raise equity or issue convertible notes to buy spot BTC/ETH (and sometimes long-tail tokens). Some pursue yield via staking or on-chain liquidity. When treasuries rebalance, meet redemptions, or face margin calls, they may sell into weakness, potentially deepening drawdowns.
Crypto treasury companies and liquidity transmission
Because many tokens were initially “locked,” Malekan argues treasuries nonetheless created de facto exit opportunities for early holders concentrating supply in leveraged vehicles and increasing reflexivity when prices turn.
Data points to watch
Count of new corporate treasuries and aggregate BTC held (reported >1M BTC in 2025 roundups).
ETH treasury totals (~6.14M ETH across ~70 entities via SΞR).
Spot flows vs. corporate disclosures during drawdowns.
Risks and mitigants
Leverage & covenants
Debt + convertibles can force selling.Liquidity mismatch
Daily-liquid shares vs. volatile on-chain assets.Governance & disclosure
Inconsistent reporting standards across DATs.
Analysis
Malekan’s thesis highlights an under-discussed feedback loop: treasuries professionalize access but can concentrate risk. The recent surge in treasuries (BTC and ETH) suggests influence beyond simple “buy-and-hold.” If consolidation reduces leverage and standardizes risk controls, DATs may stabilize otherwise, forced-seller dynamics could recur in future drawdowns.
Conclusion
Malekan’s analysis reframes the recent crypto downturn, suggesting that digital asset treasuries (DATs) didn’t merely witness the sell-off but may have intensified it. Their growing influence has made them active participants in market cycles rather than passive holders of tokens.
With corporate reserves of Bitcoin and Ethereum now substantial, the strategies behind these treasuries such as leverage use, disclosure practices, and liquidity management—are emerging as critical macro factors. Investors increasingly view DAT behavior alongside traditional drivers like interest rates, geopolitical risks, and ETF flows, marking a shift in how crypto market dynamics are understood.
FAQs
Q : What are crypto treasury companies?
A : Entities that raise capital to buy and hold digital assets (often BTC/ETH), sometimes using leverage or yield strategies.
Q : Did crypto treasury companies cause the drop?
A : Not solely; macro factors matter, but Malekan argues DATs amplified selling via leverage and exit liquidity.
Q : How many BTC treasuries exist now?
A : Roundups in October cited ~207 BTC treasuries and over 1 million BTC held collectively.
Q : How much ETH do treasuries hold?
A : Strategic ETH Reserve tracks around 6.14 million ETH across approximately 70 entities.
Q : When did Bitcoin hit its latest ATH?
A : In early October 2025, above $125,000, according to CoinGecko and major outlets.
Q : Are all DATs risky?
A : Risk varies by leverage, governance, and asset mix. Some firms aim for long-term, unlevered exposure; others take on higher risk.
Q : Where can I track prices and treasury stats?
A : Use CoinGecko for prices and SΞR for ETH treasuries; also monitor corporate disclosures and reputable research roundups.
Facts
Event
Professor argues crypto treasury companies accelerated the market dropDate/Time
2025-11-05T00:00:00+05:00Entities
Omid Malekan; Columbia Business School; Bitcoin (BTC); Ethereum (ETH); Strategic ETH Reserve (SΞR); Bitwise Asset ManagementFigures
BTC ATH >$125k (Oct. 5–6, 2025); ~207 BTC treasuries; >1M BTC held; ~70 ETH treasuries; ~6.14M ETH held (~$20B)Quotes
“The biggest damage DATs did to aggregate crypto market cap was by providing a mass exit event for supposedly locked tokens.” — Omid MalekanSources
TradingView/Cointelegraph report; CoinGecko; Reuters; Strategic ETH Reserve (links below). Strategic ETH Reserve+3TradingView+3CoinGecko+3