SKN | Crypto Treasury Firms Are Fueling Bitcoin’s Market Decline, Columbia Professor Says

Key Points:

• Columbia professor Omid Malekan argues that crypto treasury companies (DATs) have become a net drag on crypto prices, serving as mass exit vehicles for early investors.

• Over 200 firms now hold 1 million BTC collectively, but many rely on leverage, token sales, and debt, heightening market fragility.

• Analysts expect consolidation among DATs in 2026 as speculative players exit and only sustainable, value-creating firms remain.

By SKN News

As Bitcoin’s price slips below $103,000 after weeks of volatility, one academic argues that the decline isn’t just about macroeconomic pressures — it’s also being driven by the very companies meant to “institutionalize” crypto.

Omid Malekan, blockchain author and adjunct professor at Columbia Business School, says the rise of digital asset treasuries (DATs) — public companies that hold large quantities of crypto on their balance sheets — has created a “mass extraction and exit event” that’s quietly accelerating the market’s downturn.

“Any analysis of why crypto prices continue to fall needs to include DATs,” Malekan said in a widely shared post on X. “In aggregate, they turned out to be a mass extraction and exit event — a reason for prices to go down.”

While macro factors like U.S.-China trade tensions, tightening global liquidity, and cooling ETF inflows have all weighed on sentiment, Malekan’s remarks shine a spotlight on the unintended consequences of crypto treasury companies — once hailed as a bullish institutional trend.

The DAT Boom — and Its Hidden Costs

The crypto treasury model — pioneered by firms such as MicroStrategy, Marathon Digital, and dozens of publicly listed fintechs — gained momentum in 2025 as companies raced to accumulate Bitcoin and other digital assets on their balance sheets.

According to an October report by Bitwise Asset Management, at least 48 new firms added Bitcoin to their corporate treasuries this year, bringing the total number of treasury holders to 207, collectively owning over one million BTC, valued at roughly $101 billion.

Similarly, data from the Strategic ETH Reserve shows that 70 companies now hold Ether (ETH) on their balance sheets, amounting to 6.14 million ETH, or roughly $20 billion.

Malekan, however, warns that much of this capital inflow is financially engineered and potentially destabilizing. “Launching any kind of public entity is expensive,” he said. “The money required for the shell, PIPE, or 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.”

That “somewhere,” he argues, often came from overleveraged token sales and secondary market selling, which allowed early investors to exit positions under the guise of corporate treasury diversification.

Leverage, Speculation, and Forced Selling Risks

Malekan’s critique echoes growing industry concerns that many DATs have been buying crypto with borrowed money — using debt offerings, share sales, or convertible notes — effectively leveraging their exposure to volatile assets.

This practice, while profitable in bull markets, can amplify losses when prices drop. Analysts fear that as valuations fall, some treasury firms may be forced to liquidate holdings to meet debt obligations, creating cascading sell pressure across the market.

“The biggest damage DATs did to aggregate crypto market cap was by providing a mass exit event for supposedly locked tokens,” Malekan said. “I’m still amazed so many investors didn’t cry foul over this.”

Some firms have also sought to generate yield on their treasury assets through staking, lending, and liquidity provision, blurring the line between long-term treasury management and speculative DeFi activity.

Malekan believes this approach erodes confidence rather than builds it. “Raising too much money and minting too many tokens — even if they are locked or ‘for ecosystem growth’ — is the gangrene of crypto,” he wrote.

Bitcoin’s Market Context: A Correction with Structural Roots

Bitcoin has traded between $99,607 and $113,560 over the past week, down nearly 18% from its October 6 all-time high of $126,000, according to CoinGecko. The correction has been attributed to a combination of ETF outflow slowdowns, profit-taking by institutional buyers, and renewed geopolitical risk.

Yet, Malekan’s theory suggests that structural factors — specifically the behavior of crypto treasury companies — are playing a larger role in the selloff than many investors realize.

“These firms were supposed to signal institutional maturity,” said Evelyn Tan, digital asset strategist at Delphi Research. “Instead, many became speculative conduits that amplified volatility and undermined confidence in long-term holding behavior.”

What Comes Next: Consolidation or Collapse?

Analysts expect the crypto treasury trend to consolidate in 2026 as weaker players face financial pressure and capital migrates toward more established DATs with genuine operational synergies in payments, infrastructure, or custody.

“Like most bubbles, we’ll see the excess wash out,” said Tan. “The survivors will be the ones using Bitcoin and crypto strategically — not as a trading tool, but as part of a broader financial architecture.”

Malekan agrees, acknowledging that a few firms are building lasting value. “There are some companies doing it right,” he said. “But I can count them on one hand.”