Omid Malkan, a blockchain author and assistant professor at Columbia Business School, says conversations about Bitcoin's price decline should include the influence of cryptocurrency treasury companies, which have contributed to the decline.

“Any analysis of why cryptocurrency prices continue to decline needs to include DATs [digital asset treasuries]”All in all, it turned out to be a mass extraction and exit – a reason for the decline in prices,” Malkan said in an X post on Tuesday.

He added that there are a few companies that have tried to “create sustainable value, but I can count them on the fingers of one hand.”

Analysts have blamed US-China trade tensions, along with other macroeconomic factors for the cryptocurrency market's decline, which has seen Bitcoin (BTC) fluctuate between $99,607.01 and $113,560 over the past seven days, as it traded from an all-time high on October 6 of over $126,000, according to CoinGecko.

Companies are in it for the wrong reasons causing the problem

Many cryptocurrency buyouts have raised millions from investors looking for exposure to cryptocurrencies, and Malkan claimed that some of the people who launched cryptocurrency treasury companies saw the model as a “get-rich-quick scheme.”

“It's expensive to launch any kind of public entity,” he added. “The funds required for Shell/PIPE/SPAC run into the millions. So do the fees paid to all the bankers and lawyers involved.”

“The money spent on these fees had to come from somewhere,” he said.

Crypto treasury companies have acquired a large amount of digital currencies across top cryptocurrencies, using leverage through stock sales, convertible bonds and debt offerings to do so, raising concerns that leveraged companies could exacerbate the market decline through forced asset sales.

Others have sought to attract investors by generating a return on their holdings through measures such as staking, while some have indicated plans to deploy a portion of their holdings in cryptocurrency protocols for the purposes of lending and providing liquidity.

“The greatest damage DATs did to amassing crypto market cap was by providing a mass exit event for supposedly locked tokens,” Malkan claimed. “I'm still surprised that many other investors didn't object to this.”

“Raising too much money and minting too many tokens even if they are locked or for the growth of the ecosystem is gangrene of cryptocurrencies,” he added.

Related to: Are distressed companies using crypto reserves as a PR lifeline?

The crypto treasury trend will explode in 2025

The number of cryptocurrency treasuries has exploded this year, with an October report from asset manager Bitwise tracking 48 new instances of companies adding Bitcoin to their balance sheets, a total of 207, and collectively holding more than 1 million tokens, worth more than $101 billion.