Conversations about Bitcoin’s price decline should include the impact of cryptocurrency treasury companies, which have contributed to the drop, argues Omid Malekan, blockchain author and adjunct professor at Columbia Business School.
“Any analysis of why cryptocurrency prices continue to fall must include DATs.” [digital asset treasuries]”Malekan said in an
He added that there are some companies that have tried to “create sustainable value. But I can count them on one hand.”
Analysts have blamed trade tensions between the US and China, along with other macroeconomic factors, for the decline in the cryptocurrency market, which has seen Bitcoin (BTC) fluctuate between $99,607.01 and $113,560 over the past seven days, trading down from its Oct. 6 all-time high of over $126,000, according to CoinGecko.
Companies get into it for the wrong reasons and cause problems.
Many cryptocurrency buying firms were able to raise millions from investors seeking exposure to cryptocurrencies, and Malekan claimed that some of the people who launched cryptocurrency treasury companies saw the model “as a get-rich-quick scheme.”
“Launching any type of public entity is expensive,” he added. “The money needed for the shell/PIPE/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,” he said.
Cryptocurrency treasury companies have been acquiring a substantial supply of tokens in major cryptocurrencies, using leverage through equity sales, convertible notes and debt offerings, raising concerns that leveraged companies could exacerbate a market slowdown by fire-selling assets.
Others have sought to attract investors by generating returns on their holdings through measures such as staking, while some have signaled plans to deploy part of their holdings into crypto protocols for lending and liquidity provision purposes.
“The biggest damage that DATs caused to the aggregate crypto market capitalization was by providing a mass exit event for supposedly locked tokens,” Malekan stated. “I’m still surprised that many other investors haven’t complained about this.”
He added that “raising too much money and minting too many tokens, even if they are locked or for ecosystem growth, is the gangrene of cryptocurrencies.”
Related: Are struggling companies using cryptocurrency reserves as a PR lifeline?
Crypto Treasury Trend Explodes in 2025
The number of crypto treasures has skyrocketed this year, with an October report from asset manager Bitwise tracking 48 new cases of companies adding Bitcoin to their balance sheets, totaling 207 in total, and collectively owning more than one million tokens, worth more than $101 billion.
At the same time, Ether (ETH), the second most widely adopted cryptocurrency for Treasuries, has been added to the balance sheets of 70 companies, according to data from the ETH Strategic Reserve. Collectively, they own 6.14 million Ether, worth more than $20 billion.
Analysts told Cointelegraph that DATs will likely begin to consolidate 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 into other areas of Web3.
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