Treasury Firms Fueling Downward Pressure on Crypto Prices

Crypto treasury companies — firms that buy and hold digital assets as part of their corporate strategy — may be unintentionally accelerating the crypto market downturn, according to Omid Malekan, adjunct professor at Columbia Business School and author of Re-Architecting Trust.

“Any analysis of why crypto prices continue to fall needs to include digital asset treasuries (DATs),” Malekan wrote on X on Tuesday. “In aggregate, they turned out to be a mass extraction and exit event — a reason for prices to go down.”

Earlier coverage: TON Strategy CEO Plays Down Crypto Treasury ‘Bubble’ Fears, Predicts Market Maturity

Malekan added that while a handful of firms have tried to build long-term, sustainable value, the majority have operated in ways that contributed to volatility. “I can count them on one hand,” he remarked.

His comments come as Bitcoin (BTC) trades between $99,600 and $113,500 this week — down from its October 6 all-time high above $126,000, according to CoinGecko. Analysts have largely attributed the decline to macroeconomic headwinds and renewed trade tensions between the U.S. and China, but Malekan argues that corporate buying patterns within the crypto sector are also distorting supply and demand dynamics.

‘Get-Rich-Quick’ Mindset Undermines Market Stability

Malekan criticized many crypto treasury companies for prioritizing short-term financial engineering over genuine ecosystem development.

“Launching any kind of public entity is expensive,” he explained. “The money required for the shell, PIPE, or SPAC runs into the millions — as do the fees paid to bankers and lawyers. That money had to come from somewhere.”

Many treasury-backed firms raised substantial funds by issuing shares or convertible debt to acquire Bitcoin, Ether, and other major tokens. While such strategies initially boosted confidence, they also introduced leverage and liquidity risks. In a downturn, these firms may be forced to liquidate assets, amplifying selling pressure across markets.

Some companies have also experimented with yield-generating strategies, staking assets or lending tokens to boost returns — practices that can backfire when market conditions sour.

“The biggest damage DATs did to aggregate crypto market cap was by providing a mass exit event for supposedly locked tokens,” Malekan said, referring to how some projects enabled early investors to cash out large allocations under the guise of treasury management. “Raising too much money and minting too many tokens — even for ecosystem growth — is the gangrene of crypto.”

Source: Omid Malekan

2025 Sees Explosion in Corporate Crypto Holdings

The number of corporate crypto treasuries has surged in 2025, continuing a trend first popularized by MicroStrategy’s Bitcoin strategy.

A Bitwise Asset Management report in October found 48 new companies added Bitcoin to their balance sheets this year, bringing the total to 207 firms collectively holding over one million BTC — worth more than $100 billion.

Meanwhile, Ether (ETH) has emerged as the second most widely held asset in corporate treasuries. Data from Strategic ETH Reserve shows 70 companies now collectively hold 6.14 million ETH, valued at roughly $20 billion.

Analysts expect consolidation among DATs as the market matures, with stronger firms absorbing weaker ones. Others predict a strategic pivot into broader Web3 ventures, such as decentralized finance (DeFi) and real-world asset tokenization, as companies seek more sustainable value creation models.