Columbia Academic: Digital Asset Reserves Transformed into “Widespread Departure Incident”

Columbia Business School professor Omid Malekan stated that digital asset treasuries have evolved into a “mass extraction and exit event” that is pushing down crypto prices, opposing previous optimistic forecasts that corporate Bitcoin adoption would lead to sustained market expansion.

His blunt evaluation arises as Bitcoin fell below $100,000 for the first time since June, entering bear market territory with a 20% drop from its October peak, resulting in a loss of over $1 trillion from the total crypto market capitalization.

Malekan criticized the surge of treasury launches as poorly disguised schemes aimed at benefiting insiders rather than fostering long-term value.

“If you met the individuals behind these launches, it was quite clear that they viewed their DAT as a quick way to get rich,” he remarked, highlighting anxious investor presentations that overlooked essential details and relied heavily on vague buzzwords that revealed their true motives.

Any examination of why crypto prices continue to decline must consider DATs, as collectively they turned out to be a mass extraction and exit event – a factor contributing to price decreases.
There are a few exceptions, projects that genuinely attempted to follow the playbook my friend and…

— Omid Malekan (@malekanoms) November 4, 2025

Tokens Liquidated, Investors Departed

The professor detailed how launch expenses amounting to millions had to be sourced from somewhere, with companies liquidating supposedly locked tokens to cover SPAC fees, banking costs, and undisclosed advisory contracts.

He noted that BitMEX Research uncovered many of these dubious transactions that were rarely mentioned in promotional materials.

These findings expose conflicts of interest where treasury firms appointed founders or venture capitalists to boards, subsequently directing shareholder funds to their own startups and portfolio companies.

In addition to direct extraction, treasuries offered unexpected liquidity for tokens that the market believed were securely locked.

“Many altcoins had a significantly larger circulating supply than we anticipated,” Malekan noted, observing that markets quickly adjusted to this unforeseen supply increase while also recalibrating expectations regarding what these projects might do with supposedly restricted tokens or vaguely defined ecosystem funds.

The repercussions extended beyond immediate selling pressure, undermining trust across the entire token market as investors began to question whether ecosystem funds would be misappropriated as personal slush funds or used to artificially inflate user metrics.

Malekan’s conclusion challenges the belief that treasuries represented pure benefits, labeling supporters who promoted them as such “idiots who should not be taken seriously ever again.”

He stressed that raising excessive capital and minting an excessive number of tokens, even if locked or earmarked for ecosystem development, signifies a chronic issue that undermines project viability over time.

He drew comparisons to the 2017 bull cycle, except this time wealth shifted from crypto investors broadly to a select group of insiders.

Market Divergence Indicates Liquidity Misallocation

Further contributing to the current market sentiment, Wintermute’s analysis indicated that crypto was significantly underperforming despite favorable macroeconomic conditions, including rate reductions and the cessation of quantitative tightening.

The GMCI-30 index fell 12% last week, with gaming down 21%, Layer 2s declining 19%, and meme coins dropping 18%, even as global equities approached record highs.

The steep decline was primarily driven by unprecedented levels of leverage, particularly the $20 billion liquidation event on October 10, which resulted in an average of 300,000 traders being liquidated daily.

Global liquidity continues to grow as central banks lower rates to encourage growth, yet incremental capital is not reaching crypto markets.

https://t.co/0x7UKVwQZo

— Wintermute (@wintermute_t) November 4, 2025

Stablecoin supply has increased by 50% year-to-date, adding $100 billion, yet Bitcoin ETF inflows have stagnated, with assets remaining around $150 billion since the summer, while secondary volumes of digital asset treasuries on exchanges like Nasdaq have completely collapsed.

“Of the three inflow engines that drove the first half of the year, only one is still operational: stablecoins,” remarked Wintermute strategist Jjay_dm, explaining how retail investors have shifted towards equities, AI, and prediction markets as ETF novelty diminished.

Currently, Bitcoin has lost crucial support at the 85th percentile cost basis, near $109,000, and is now trading around $103,500, with the next significant level at the 75th percentile, approximately $99,000.

Source: CryptoQuant

CryptoQuant reported that short-term holders increased loss-selling pressure, with around 30,300 Bitcoin being deposited while at a loss.

Despite Coinbase’s alerts that treasuries have “largely ghosted” the market since October 10, some firms continued to engage in aggressive purchasing.

Just two days ago, Strategy also announced it acquired 397 BTC between October 27 and November 2 for a total of $45.6 million in cash.

The post Columbia Professor: Digital Asset Treasuries Turned Into “Mass Exit Event” appeared first on Cryptonews.