What happened?
Columbia Business School professor Omid Malekan said many digital asset treasuries turned into a “mass extraction and exit event,” with projects dumping tokens to cover fees and enrich insiders. Bitcoin fell below $100,000 and the crypto market lost over $1 trillion as prices slid about 20% from the October high. The revelations showed much higher-than-expected circulating supply, conflicts of interest, and a big hit to trust in token projects.
Who does this affect?
Retail and institutional crypto investors are getting hit by immediate losses and greater uncertainty about token economics. Holders of tokens tied to these treasuries faced unexpected dilution and selling pressure as supposed “locked” supply moved into markets. Founders, VCs, and companies that used treasuries to raise and funnel capital now face reputational damage and increased scrutiny.
Why does this matter?
The treasury-driven exits sucked liquidity out of the market and worsened the sell-off, making it harder for new capital to flow into crypto. With ETF inflows stalled and stablecoins the main remaining source of funds, recovery looks slower and volatility is likely to stay high. That repricing could extend the bear phase, force stricter governance and token limits, and shift investor demand toward projects with clearer, more disciplined token economics.