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Crypto Journalist
Anas Hassan
Crypto Journalist
Anas Hassan
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Columbia Business School Professor Omid Malekan stated that digital asset treasurers have turned into a “mass extraction and exit event“Crypto prices fell, contradicting the bullish forecasts that the company Bitcoin adoption will fuel sustained market growth.
His harsh assessment comes as Bitcoin fell below $100,000 for the first time since June and entered bear market territory with a 20% decrease from its October record, wiping more than $1 trillion from the total capitalization of the crypto market.
Malekan criticized the wave of treasury launches as thinly veiled schemes designed to enrich insiders rather than create sustainable value.
“If you meet people launching these, it was quite obvious that they saw their DAT as a get-rich-quick scheme,” he wrote, pointing to nervous investor presentations that gloss over crucial details and overuse empty buzzwords that telegraph their true intentions.
Tokens Dumped, Investors Abandoned
The professor explained how the launch costs in the millions had to come from somewhere, with the companies unloading tokens presumably closed to cover SPAC fees, bank fees and undisclosed advisory agreements.
He said that BitMEX Research exposed many of these shady deals that were rarely disclosed in marketing materials.
They reveal conflicts of interest where treasury companies have appointed founders or venture capitalists to boards, then funneled shareholder money to their own startups and portfolio companies.
Beyond direct mining, treasurers provided unexpected liquidity for tokens that markets believed were safely locked away.
“Many alts had a much larger circulating supply than we thought,” Malekan observed, noting that markets quickly discounted this unexpected supply increase while simultaneously adjusting expectations about what other projects could do with supposedly restricted tokens or vaguely defined ecosystem funds.
The damage extended beyond immediate selling pressure, eroding confidence in the entire token market as investors wondered whether ecosystem funds would be misused as personal slush funds or to artificially prop up user metrics.
Malekan’s conclusion challenges the idea that treasurers represent pure upside, calling out the supporters who have promoted them as such”idiots who should never be taken seriously again.”
He emphasized that the raising of excessive capital and the connection of too many tokens, even if it is closed or designed for the growth of the ecosystem, represents a persistent disease that kills the viability of the project over time.
He made parallels to the bull cycle of 2017, except that this time the wealth transferred from crypto investors largely to a small group of insiders.
Market divergence shows a misdirection of liquidity
Adding fuel to the current market sentiment, Wintermute’s analysis revealed that crypto was subjected dramatically despite the macroeconomic conditions of support, including tax cuts and the end of quantitative easing.
The GMCI-30 index fell 12% last week, with games down 21%, 2-layers down 19%, and memes down 18%, despite global equities pushing near record highs.
The sharp drop was mainly driven by unprecedented leverage levels, particularly the $20 billion settlement event on October 10which left 300,000 traders liquidated every day on average.
Global liquidity continues to expand as central banks cut rates to stimulate growth, but the incremental capital is not reaching the crypto markets.
Stablecoin supply is up 50% year-to-date, adding $100 billion, but Bitcoin ETF inflows have stagnated, with assets hovering around $150 billion since the summer, while secondary digital asset treasury volumes on exchanges like Nasdaq have collapsed entirely.
“Of the three flow engines that drove the first half of the year, only one is still working: stablecoins.,” noted Wintermute strategist Jjay_dm, explaining how retail has shifted toward stocks, AI and prediction markets as the ETF novelty wears off.
Currently, Bitcoin has lost the key support at the 85th percentile cost base, near $109,000, and is now trading around $103,500, with the next critical level at the 75th percentile, around $99,000.
CryptoQuant reported that short-term holders intensified the loss selling pressure, with around 30,300 Bitcoin deposited under water.
In spite Coinbase Warnings that the treasurers have “largely ghosted” the market since October 10, some companies continued to maintain aggressive buying.
Just two days ago, Strategy also announced that it acquired 397 BTC between October 27 and November 2 for a total of $45.6 million in cash.
