Professor of the Columbia Business School Omid Malekan has put forward an unexpected version of the cryptocurrency market crash. In his opinion, the culprits behind the current decline are companies with cryptocurrency reserves that are demonstrating "massive withdrawals and exit from the market."
“Any analysis of why cryptocurrency prices continue to fall must include DAT [digital assets in reserves],” wrote Malekan on social media X. “Together, they showed a massive outflow of funds and exit from the market, which caused the price drop.”
The professor added that only a few companies tried to “work for the future and provide real benefits. But I can count them on one hand.”
Companies pursued the wrong goals
Many companies with cryptocurrency reserves were able to attract millions from investors seeking access to cryptocurrencies. Malekan claims that some founders of such companies viewed this model as a “get-rich-quick scheme.”
“Launching any public enterprise is costly,” he explained. “The money to launch a public company through various financial schemes amounts to millions. As do the fees paid to all participating bankers and lawyers.”
“The money spent on these commissions had to come from somewhere,” added the professor.
Companies with cryptocurrency reserves accumulated significant volumes of top cryptocurrency tokens by using leverage through stock sales, convertible bonds, and debt offerings. This raised concerns that leveraged firms could exacerbate the market downturn through forced asset sales.
Some companies tried to attract investors by generating returns from their assets through staking, while others announced plans to allocate part of their assets to cryptocurrency lending and liquidity provision protocols.
“The greatest damage that companies with crypto reserves inflicted on the total market capitalization was that they allowed for a mass sale of supposedly locked tokens,” claims Malekan. “I am still amazed that so many other investors were not outraged by this.”
He added that “attracting too much money and issuing too many tokens, even if they are locked or intended for ecosystem growth, is the gangrene of cryptocurrencies.”
Explosive growth in 2025
The amount of cryptocurrency reserves exploded this year. October's report from asset management company Bitwise recorded 48 new instances of Bitcoin being added to company balances, with a total of 207 companies collectively holding over one million tokens worth more than $101 billion.
Companies buying Bitcoin in Q3 2025. Source: Bitwise
Ethereum, the second most sought-after cryptocurrency for corporate reserves, was added to the balances of 70 companies, according to data from Strategic ETH Reserve. Together, they hold 6.14 million Ethereum worth over $20 billion.
Malekan's version challenges traditional explanations for the price drop, which are usually linked to the trade war between the US and China, as well as other macroeconomic factors. The professor points to structural problems within the crypto industry itself, where the pursuit of quick profits undermines long-term market stability.
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