{"id":17695,"date":"2025-11-05T08:34:53","date_gmt":"2025-11-05T07:34:53","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=17695"},"modified":"2025-11-05T08:34:53","modified_gmt":"2025-11-05T07:34:53","slug":"crypto-treasury-firms-have-a-hand-in-market-decline-claims-academic-expert","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/11\/05\/crypto-treasury-firms-have-a-hand-in-market-decline-claims-academic-expert\/","title":{"rendered":"“Crypto Treasury Firms Have a Hand in Market Decline, Claims Academic Expert”"},"content":{"rendered":"

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Discussions surrounding Bitcoin\u2019s price decline ought to encompass the influence of crypto treasury firms, which have played a part in the downturn, asserts Omid Malekan, a blockchain author and adjunct lecturer at Columbia Business School.<\/p>\n

\u201cAny evaluation of why crypto valuations<\/a> continue to drop must incorporate DATs [digital asset treasuries],\u201d Malekan expressed<\/a> in a post on X on Tuesday. \u201cCollectively, they proved to be a substantial extraction and exit episode \u2014 a factor causing prices to decline.\u201d<\/p>\n

He remarked that few firms have attempted to \u201cestablish sustainable value. Yet I can count them on a single hand.\u201d<\/p>\n

Experts have attributed the downturn in the crypto market to trade conflicts between the US and China, alongside various macroeconomic influences<\/a>, with Bitcoin (BTC<\/a>) fluctuating between $99,607.01 and $113,560 over the past week, trading down from its all-time high of above $126,000 on October 6, according<\/a> to CoinGecko.<\/p>\n

Source: <\/em>Omid Malekan<\/em><\/a><\/figcaption><\/figure>\n

Companies’ Wrong Motivations Creating Issues<\/h2>\n

Numerous cryptocurrency purchasing firms successfully raised millions from investors seeking crypto exposure, and Malekan asserted that some individuals launching crypto treasury firms viewed the model \u201cas a scheme to get rich quickly.\u201d<\/p>\n

\u201cEstablishing any type of public entity is costly,\u201d he noted. \u201cThe funds needed for the shell\/PIPE\/SPAC soar into the millions, as do the fees given to all involved bankers and lawyers.\u201d<\/p>\n

\u201cThe funds expended on those fees needed to originate from some source,\u201d he indicated.<\/p>\n

Crypto treasury firms have been amassing a significant quantity of tokens across major cryptocurrencies, employing leverage through the sale of shares, convertible notes, and debt offerings, raising concerns that leveraged companies might intensify a market downturn<\/a> by compelled liquidation of assets.<\/p>\n

Others have sought to attract investors by generating returns on their holdings via methods like staking<\/a>, while some have indicated plans to allocate part of their<\/a> holdings into crypto protocols for lending and liquidity purposes.<\/p>\n

\u201cThe most significant harm DATs caused to the overall crypto market cap was by creating a mass exit event for ostensibly locked tokens,\u201d Malekan stated. \u201cI remain astonished that so many other investors didn\u2019t voice their discontent over this.\u201d<\/p>\n

He added, \u201craising too much capital and minting excessive tokens, even if locked or aimed at ecosystem growth, is the gangrene of crypto.\u201d<\/p>\n

Related: <\/strong><\/em>Are struggling firms utilizing crypto reserves as a public relations lifeline?<\/strong><\/em><\/a><\/p>\n

Crypto Treasury Phenomenon Surges in 2025<\/h2>\n

The quantity of crypto treasuries has surged dramatically this year, with an October report from asset manager Bitwise tracking<\/a> 48 new instances of firms adding Bitcoin to their balance sheets, totaling<\/a> 207 overall, which collectively hold over one million tokens valued at over $101 billion.<\/p>\n