Are Crypto Treasury Firms Secretly Fueling Bitcoin’s Steep Price Decline?

TLDR

• Omid Malekan says crypto treasury firms are driving recent Bitcoin price declines through aggressive selling.
• He explains that leveraged buys and debt-fueled expansion have made these firms vulnerable to market downturns.
• Malekan criticizes most crypto treasury companies for focusing on short-term profits instead of ecosystem growth.
• He warns that mass token releases and forced sales are creating heavy pressure on digital asset prices.
• The professor calls this pattern the gangrene of crypto and urges more accountability in corporate treasury actions.

Omid Malekan, a blockchain author and adjunct professor at Columbia Business School, says crypto treasury companies are worsening market declines. He argues that their leveraged strategies and bulk token sales have created sharp drops in Bitcoin and other assets. The professor believes that these firms’ debt-driven expansion has intensified market instability.

Bitcoin Sales Linked to Treasury Exits

Malekan states that crypto treasury firms accumulated tokens using leveraged purchases and capital from share sales and convertible notes. He says these corporations often plan mass exits that lead to heavy token sales. These actions, he adds, frequently trigger market declines and erode investor confidence.

He notes that only a few crypto treasury companies focus on long-term value creation. Others, he claims, prioritize quick profits instead of ecosystem development. This behavior, he explains, continues to weaken trust across the digital asset market.

Malekan highlights that debt-funded acquisitions have worsened the issue. As debts rise, companies are forced to sell large holdings. These liquidations, he says, amplify downward pressure on asset prices.

Professor Warns Crypto Treasuries Fuel Market Decline

According to Malekan, many crypto treasury firms raised millions during new investor waves. They used this funding to purchase Bitcoin and other tokens in bulk. He explains that such aggressive buying made these firms vulnerable to falling asset values.

When debts grow or prices decline, they must sell to maintain solvency. Malekan warns that such sell-offs accelerate market drops. He calls these forced liquidations a recurring cause of price volatility.

Some crypto treasury firms also offer staking and liquidity services. These activities lock up tokens, which can increase market exposure. Malekan cautions that this practice deepens their vulnerability during rapid downturns.

Malekan describes the current situation as the “gangrene of crypto.” He argues that excessive funding and token issuance harm long-term stability. He says these companies issue tokens intended for lock-up but later release them during liquidity shortages.

He criticizes the lack of outcry from market participants.

Malekan believes such behavior drains confidence and reduces overall market capitalization.

He connects these corporate practices with broader economic pressures. Trade tensions between the United States and China, he notes, further influence market volatility. He stresses that both factors must be examined to understand current price trends.

Rising Numbers of Corporate Bitcoin Holders

Despite market turbulence, the number of crypto treasury companies continues to grow. Malekan cites recent data from Bitwise showing rapid corporate adoption. In October alone, 48 new firms added Bitcoin to their balance sheets.

The report says 207 companies now hold Bitcoin collectively exceeding one million BTC. Their combined reserves are valued at over $101 billion. Ethereum also remains popular, with 71 companies holding it as a core reserve asset.

In the past week, Bitcoin traded between $99,607.01 and $113,560. This range remains well below the October high of $126,000. Analysts continue to monitor how crypto treasury behavior affects these ongoing market trends.

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